TIDMJEMI
RNS Number : 3560Q
JPMorgan Glb Emerging Mkts Inc Tst
18 October 2019
LONDON STOCK EXCHANGE ANNOUNCEMENT
JPMORGAN GLOBAL EMERGING MARKETS INCOME TRUST PLC
FINAL RESULTS FOR THE YEARED 31ST JULY 2019
Legal Entity Identifier: 549300OPJXU72JMCYU09
Information disclosed in accordance with DTR 4.2.2
CHAIRMAN'S STATEMENT
Performance
I am delighted to present my first annual statement as Chairman
of the Company and report on a rewarding year for shareholders.
The year to 31st July 2019 was another positive one for
investors in emerging markets leading to a rise in our benchmark,
the MSCI Emerging Markets Index with net dividends reinvested (in
sterling terms), of +4.8%. Against this positive background our
Investment Managers were able to add further to returns through
favourable stock selection, with the result that the total return
on net assets was +11.9%. The total return to shareholders was
+18.5% reflecting the narrowing of the share price discount to net
asset value from 6.4% to 1.0%. Since year-end, the Company's share
price has decreased to 132.0p at the time of writing.
The Investment Managers' Report that follows provides more
detail on the Company's investment strategy and performance. The
Board recognises the wide difference between the total return on
net assets and the performance of the benchmark. The Company's
income objective means that the composition of the portfolio is
significantly different to the composition of the benchmark index.
This means that the pattern of returns may, in any given period,
vary meaningfully from the benchmark index, which the Board
understands and accepts.
Revenue and Dividends
Gross revenue for the year amounted to GBP22.3 million (2018:
GBP21.4 million) with net revenue of GBP17.6 million (2018: GBP17.1
million). Net revenue return per ordinary share for the year,
calculated on the average number of shares in issue, was 5.92p
(2018: 5.78p).
In the current financial year, the Board paid three interim
dividends of 1.0p per share and has announced the payment of a
fourth interim dividend of 2.1p per share. This brings the total
dividend for the year to 5.1p per share, a 2% increase from last
year. The Board continues the approach of paying four interim
dividends, reflecting the support we have received from
shareholders for a regular and timely income stream. The Board is
seeking shareholder authority to continue this dividend payment
policy for the Company at the forthcoming Annual General Meeting
('AGM').
As shareholders are aware, the Company receives dividends in the
currencies of developing countries and US dollars, but pays
dividends in sterling. It has not been the Company's policy to
hedge currency risk as that is expensive and, for many currencies,
impracticable. That policy inevitably means that the Company's
asset values and cash flows will be adversely or favourably
affected by currency movements from time to time.
Share Capital
During the year, the share price traded occasionally at a
premium to net asset value. The Company issued 450,000 new shares
for a total consideration of GBP599,000. The impact of the share
issuances on the NAV was immaterial. Since the year end, the
Company has not issued any shares.
The Company did not carry out any share repurchases during the
year nor since the year end.
The Board is seeking shareholder authority at the forthcoming
AGM to have the flexibility to issue up to a further 10% of the
Company's issued share capital. The intention is to use this
authority to meet demand for the Company's shares when they trade
at an appropriate premium to net asset value.
Key Performance Indicators ('KPIs')
The Board tracks a series of KPIs. Further details may be found
on page 16 of the Annual Report. The Board pays particular
attention to performance, ongoing charges, gearing, income
available to pay dividends and the investment risk of the
portfolio.
Gearing
The Company has two US $20 million fixed rate loan facilities
with NAB, repayable in October 2020 (2.31% per annum) and November
2022 (3.28% per annum). As at 31st July 2019, gearing stood at 5.9%
(2018: 6.2%).
Management Fee
The Board is pleased to report that with effect from 1st August
2019, JPMorgan has agreed to charge their management fees based on
the Company's net assets rather than on total assets less current
liabilities. Therefore, all loans drawn down under the loan
facility will be deducted for the purpose of the management fee
calculation.
The Board and Corporate Governance
As previously reported, Andrew Hutton retired from the Board at
the conclusion of the last AGM on 27th November 2018. Richard
Robinson assumed the role of Chairman of the Nomination Committee
and became the Senior Independent Director.
Following the Board's annual evaluation by the Nomination
Committee, it felt that its current composition and size is
sufficient at the present time and no further changes are
anticipated over the next 12 months. The Board has a plan to
refresh the Board in an orderly manner over time. Therefore, as
part of its long term succession planning and to ensure continuity,
the Board will seek to recruit a new non-executive Director in
early 2021.
The Board supports annual re-election for all Directors, as
recommended by the UK Corporate Governance Code, and therefore all
of the Directors will stand for re-election at the forthcoming
Annual General Meeting. Shareholders who wish to contact the
Chairman or other members of the Board may do so through the
Company Secretary or the Company's website, details of which appear
below.
As detailed in the Investment Managers' report, environmental,
social and governance ('ESG') considerations are integral to the
Investment Managers' investment process. The Board shares the
Investment Managers' view of the importance of ESG when making
investments that are sustainable over the long term and the
necessity of continued engagement with investee companies
throughout the duration of the investment.
Annual General Meeting
The Annual General Meeting will be held at on Thursday, 28th
November 2019 at 2.00 p.m. The meeting will include a presentation
from the Investment Managers on investment policy and performance.
There will also be an opportunity for shareholders to meet the
Board and representatives of JPMorgan after the meeting. It would
be helpful if shareholders seeking answers to detailed questions
put them in writing beforehand, addressed to the Company Secretary
at JPMorgan Funds Limited, 60 Victoria Embankment, London EC4Y 0JP.
Alternatively, questions may be submitted via the Company's website
(www.jpmglobalemergingmarketsincome.co.uk). Shareholders who are
unable to attend the Annual General Meeting in person are
encouraged to use their proxy votes. Proxy votes may be lodged
electronically, whether shares are held through CREST or in
certificate form and full details are set out on the form of
proxy.
Outlook
The Board is cognisant of the increasing number of emerging
economic, social and geopolitical concerns which may cause anxiety
to investors. Slowing economies, ongoing trade tensions between the
US and China regarding goods tariffs and the uncertainties
surrounding Brexit are amongst the issues which may result in
further market volatility in the near term. The Board recognises
these challenges and remains confident that the Investment Managers
are well positioned and resourced to identify companies with good
prospects for dividend generation, growth potential and resilient
financial characteristics which are capable of achieving strong
long-term performance for shareholders.
Sarah Fromson
Chairman
17(th) October 2019
INVESTMENT MANAGERS' REPORT
Performance review - strong performance against a backdrop of
rising trade tensions
The Company delivered positive performance for the review period
- both in absolute and relative terms. Over the year to 31 July
2019, the Company's return on net assets was 11.9%, outperforming
its benchmark, the MSCI Emerging Markets Index, which rose by 4.8%
(on a total return (net) basis, in sterling terms). The value of
the Company's shares (including dividends) rose by 18.5% over the
period. Judicious stock picking contributed positively to returns
over the year.
For the first half of the review period, markets were turbulent,
amidst signals of weakening global growth and elevated geopolitical
uncertainty, not least surrounding the simmering trade tensions
between the world's two largest economies, the United States and
China. These concerns did not evaporate in the second half of the
year and the trade tussles continued; by the end of the period,
this damaging dispute appeared no closer to resolution than it had
been a year earlier. Nevertheless, emerging market equities were
able to make progress in the second half of the Company's year and
market sentiment improved, largely as a result of the US Federal
Reserve adopting a dovish monetary policy, cutting interest rates
in an effort to reduce market volatility and stave off recession. A
number of central banks around the world, including in emerging
markets, followed suit.
Given the ongoing uncertainty throughout the 12-month period,
albeit with less market turmoil in the second half of the year than
the first, we are pleased that our stock picking contributed
meaningfully to the Company delivering a strong set of annual
results and outperforming the index by some considerable
margin.
Spotlight on stocks, markets, sectors and countries
In this section we highlight specific factors that have impacted
portfolio performance (both positively and negatively) over the
year.
China (including Hong Kong) remains our largest country
exposure. The Chinese economy has been challenged on numerous
fronts, with domestic industrial output growth falling to its
slowest pace since February 2002 whilst retail sales growth also
weakened. However, certain industrial indicators suggest recent, if
tentative, signs of recovery, with production edging upwards.
Despite continued US trade tension uncertainty and the political
disturbance in Hong Kong, China was a key contributor to
performance, primarily through stock selection where we identified
interesting long-term opportunities, particularly in
consumer-orientated China A-share stocks. Of note were our
positions in electrical appliance manufacturer Midea, dairy
products producer Inner Mongolia Yili and life insurance companies
such as China Pacific Insurance.
China Resources Power was a notable performance detractor. It
not only performed poorly but also disappointed in terms of its
dividend pay-out. In spite of it having been one of our larger
positions, we have a strict process discipline to sell stocks when
they deliver a specific pay-out disappointment like this and we did
so on this occasion.
Taiwan is our second largest country exposure - and our largest
country overweight position relative to the Company's benchmark.
Given our emphasis on identifying stocks that generate dividends,
we appreciate the positive dividend culture in this market and
Taiwanese stocks have been key contributors to performance. These
include our largest stock holding, Taiwan Semiconductor
Manufacturing (TSMC) which is the world's largest contract
chipmaker. TSMC reported positive quarterly earnings in July as
well as forecasting stronger demand for the second half of the
year, which helped to assuage earlier concerns around lower
smartphone growth and Huawei-related weakness.
Mexican equities were volatile over the review period,
reflecting the negative economic outlook and ongoing uncertainty
about government policy and political disagreements within the
government itself. Nevertheless, our stock selection in Mexico
added value and is a positive example of how our focus on
income-yielding stocks can be helpful. For example, Kimberly-Clark
de Mexico performed well for us, benefiting from a fall in pulp
prices towards the end of the review period. It is also a
dependable dividend payer.
Our South African holdings detracted from overall returns,
driven by weakness in global and emerging markets as well as South
Africa's own economic troubles and political infighting. A
generally softer economy constrained stocks and held back names we
hold including brand promoter AVI and Vodacom.
By sector, Financials was the most important contributor to
performance. This remains the Company's largest sector weighting,
on both an absolute and a relative basis. Our stock selection
within the sector was positive and the top five performance
contributors from the entire portfolio were all Financials. One of
these was Russia's largest bank Sberbank, which has delivered
record profits in recent years, amid Russia's recession and
subsequent sluggish recovery. It announced a record high dividend
for 2018 (representing 33% growth in the value of dividends per
share) and continued on its track of increasing its dividend
pay-out ratio - a positive factor for us.
Uncovering sustainable businesses that have good dividend growth
prospects
The Company's approach, which is to invest in a diversified
portfolio of high yield and high profitability stocks to receive
dividends from across sectors and countries, has not changed. We
continue to find many stocks that look attractive from a dividend
perspective. The revenue numbers on page 44 of the Annual Report
show that for this financial year the earnings per share of the
Company increased from 5.78p to 5.92p. However we recognise that
the weakness of sterling over the year was a key factor (via
currency translation). In fact the underlying businesses in the
portfolio faced challenges during the year (e.g. with China
slowdown and global trade issues as discussed above) and struggled
to grow dividends in local terms. The overall outcome in terms of
business results was frustrating this year though we continue to
have a positive view of the underlying companies in the
portfolio.
Overall, with the increase in earnings per share over the year,
as discussed in the Chairman's Statement, this allowed for an
increase in the dividend paid as well as a further increase in the
Company's revenue reserves. Revenue reserves are important as they
could be used to help support dividend payments in future years, if
there were to be a period when dividend receipts from portfolio
companies were weaker.
Portfolio changes
Portfolio changes over the year have been relatively modest,
consistent with our policy of investing for the long term and
benefiting from the continued dividend streams of the companies we
hold.
We continue to see China as an area of opportunity where we can
best deliver the Company's diversified income and capital growth
strategy. During the volatile first half of the review period we
identified several Chinese stock opportunities. As the market
declined, we made meaningful portfolio additions, adding to both
Chinese A-shares as well as to Hong Kong-listed China stocks,
thereby taking advantage of better valuations to increase our
overall China weighting. Although we have subsequently trimmed some
of these names after a strong run, our percentage of Chinese
investments held has increased year-on-year.
Our more recent portfolio changes have been stock-specific
decisions rather than based on any broader sector/country
selection. Market weakness and negative sentiment towards
information technology names provided us with opportunities to add
to some favoured names, such as TSMC.
We added to TSMC after its share price weakened, following the
negative narrative around the Chinese telecoms provider Huawei,
which is a major buyer of TSMC's chips. Our overall view is that
although individual customers can face specific issues such as
this, the strength of the TSMC ecosystem, and its competitive
advantages versus its peers, mean that the company will continue to
be in a strong position going forward to generate attractive levels
of profitability. TSMC is also typical of Taiwan's positive
dividend culture, having recently announced plans to introduce
sustainable quarterly dividends.
We also added to another Taiwanese holding, Vanguard
International Semiconductor Corporation. We have grown increasingly
positive on this business, notably its tilt towards attractive
areas of the semiconductor industry (such as power management
chips). It has expanded capacity to meet growing demand - and allow
incremental growth - while also continuing to demonstrate a desire
to deliver a consistent stream of dividends.
In terms of sales, we referred earlier to China Resources Power,
which we exited due to its dividend payout disappointment. As we
place so much store in understanding dividend policies before
buying a stock, these kinds of disappointments are relatively rare.
The two other reasons for us to sell stocks are: (a) a recognition
that the fundamentals of the business are worse than we had thought
previously; and (b) higher valuations (and lower dividend yields)
which signal lower returns in the future. Valuation-driven sales
tend to be incremental (i.e. relatively slowly over time as the
valuation increases) but one example of a stock which we completely
exited on this basis during the period was Petrobras Distribudora,
the fuel distribution subsidiary of Petrobras in Brazil, which we
sold after a strong move in the shares had taken the dividend yield
down to less attractive levels.
Our engagement on Environmental, Social and Governance (ESG)
issues
We pay particular attention to issues that could affect the
prospects for stocks within the Company's portfolio. We believe
strongly that ESG considerations (particularly Governance) need to
be a foundation of any investment process supporting long-term
investing and that corporate policies at odds with environmental
and social issues are not sustainable in the long run.
We draw a direct link between the dividend policies of companies
and our views on governance, i.e. a direct demonstration of a
desire to return cash to shareholders is a tangible and positive
governance indicator. We have discussed this issue with many
companies over time - good examples would include our engagement
with many Korean corporates which typically have relatively low
pay-out ratios compared with those of other Emerging Markets.
We have also engaged with management teams of investee companies
on a variety of other ESG issues. For example, during the year we
undertook a review of environmental and social risks amongst
textile companies in Asia, asking questions about areas such as
emissions, waste management and labour practices. We asked
management teams about this as well as studying the requirements
their own customers put on them. Overall we were reassured by our
findings; where there were negative issues highlighted we are
satisfied that the suppliers are working (sometimes together with
their brand customers) to remedy the situation. In our view,
manufacturers with good technology, scale and ESG practices are the
ones we expect to gain market share over time.
Outlook
We remain in uncertain economic, market and political territory.
Stock markets have recovered strongly since the beginning of 2019
but remain vulnerable to negative news flow, while economic growth
indicators have stumbled and global manufacturing output is weaker
than it has been for several years.
We continue to believe that, going forward, the most important
short-term risks to progress are global growth remaining sluggish,
a stubbornly-strong US dollar and, of course, the trade collisions
between the US and China - which are far from resolved.
These all weigh heavily on the prospects for a global economy
already in the doldrums and are reflected in weakening corporate
performance across emerging markets. Central banks around the world
have stepped in with monetary easing measures and, in the US, rates
look much more likely to fall than rise for the remainder of the
year. Such intervention may soften the landing for global
economies, but to varying degrees.
Investors are fearful that a global recession could be on the
horizon and certain 'end of cycle' signals in the United States and
other developed nations support this opinion. If it does happen,
emerging market economies will not be immune to a global slowdown.
A so-called 'Goldilocks Scenario' ('not too hot, not too cold') for
the US would be the ideal economic outcome for emerging markets.
But even if that does not ensue, we take solace from the fact that
emerging markets economies face fewer imbalances now than they did
during previous economic slowdowns.
Following the slowest growth in China's modern era, we are yet
to see Chinese authorities really step up their efforts to support
domestic demand through targeted fiscal measures and monetary
easing by the People's Bank of China. Given that China has been
cited as one of the primary sources of the global slowdown, such
policy measures could boost growth not just domestically but around
the world.
Although the investing backdrop looks more challenging, we have
a positive view about the long-term prospects for dividend
generation from the stocks held in the portfolio. However, whilst
we are positive about long-term prospects we remind shareholders
that the company receives dividends in local currencies and US
dollars but pays dividends in sterling (which could be volatile
depending on, for example, developments around Brexit). As such,
movements in sterling will have an impact on the value of dividend
payments.
We adopt a long-term view in analysing dividends and
profitability drivers and the portfolio is positioned to capture
this. The Company invests in stocks that can generate earnings and
cash flow to pay out dividends and also to reinvest in the future
of their own businesses.
We remain focused on investing in sound businesses that have the
potential to deliver income and capital returns. Our aim is that
the Company should continue to have a grounded approach and a
balanced risk profile that will deliver good returns and reward
shareholders willing to invest for the long term.
Omar Negyal
Jeffrey Roskell
Amit Mehta
Investment Managers
17(th) October 2019
Principal Risks
The Directors confirm that they have carried out a robust
assessment of the principal risks facing the Company, including
those that would threaten its business model, future performance,
solvency or liquidity.
With the assistance of the Manager, the Board has drawn up a
risk matrix, which identifies the key risks to the Company. In
assessing the risks and how they can be mitigated, the Board has
given particular attention to those issues that threaten the
viability of the Company. These key risks fall broadly under the
following categories:
-- Investment
an inappropriate investment strategy, for example poor stock
selection or asset allocation or foreign exchange weakness, may
lead to underperformance against the Company's benchmark index and
peer companies. Insufficient local currency income generation which
may lead to a cut in the dividend. The Board manages these risks by
diversification of investments through its investment restrictions
and guidelines, which are monitored and reported on by the Manager.
The Manager provides the Directors with timely and accurate
management information, including performance data and attribution
analyses, revenue estimates, currency performance, liquidity
reports and shareholder analyses. The Board monitors the
implementation and results of the investment process with the
Investment Managers, who attend Board meetings, and reviews data
which show statistical measures of the Company's risk profile.
-- Strategy
Inappropriate gearing leading to sub-optimal returns or lack of
opportunity from under-gearing. The Board has set a gearing range
within which the Investment Managers employ the Company's gearing
strategically. If the Company's business strategy is no longer
appropriate, it may lead to a lack of investor demand. This may
result in the Company's shares trading at a narrower premium or a
wider discount. The Board discusses these risks regularly and takes
advice from the Manager and its professional advisers.
-- Financial
the financial risks faced by the Company include market price
risk, interest rate risk, liquidity risk and credit risk. Further
details are disclosed in note 22 on pages 58 to 63 of the Annual
Report.
-- Corporate Governance and Shareholder Relations
Details of the Company's compliance with Corporate Governance
best practice, including information on relations with
shareholders, are set out in the Corporate Governance report on
pages 24 to 28 of the Annual Report.
-- Operational
Loss of key staff by the Manager, such as the Investment
Managers, could affect the performance of the Company. Disruption
to, or failure of, the Manager's accounting, dealing or payments
systems or the depositary's or custodian's records could prevent
accurate reporting and monitoring of the Company's financial
position. This includes the risk of cybercrime and consequent
potential threat to security and business continuity. Details of
how the Board monitors the services provided by the Manager and its
associates and the key elements designed to provide effective
internal control are included in the Risk Management and Internal
Control section of the Corporate Governance report on page 27 of
the Annual Report.
-- Accounting, Legal and Regulatory
in order to qualify as an investment trust, the Company must
comply with Section 1158 of the Corporation Tax Act 2010 ('Section
1158'). Details of the Company's approval are given under 'Business
of the Company' above. Were the Company to breach Section 1158, it
would lose its investment trust status and, as a consequence, gains
within the Company's portfolio could be subject to Capital Gains
Tax. The Section 1158 qualification criteria are continually
monitored by the Manager and the results reported to the Board each
month. The Company must also comply with the provisions of the
Companies Act 2006 and, since its shares are listed on the London
Stock Exchange, the UKLA Prospectus Rules, Listing Rules and
Disclosure, Guidance & Transparency Rules ('DTRs'). A breach of
the Companies Act could result in the Company and/or the Directors
being fined or the subject of criminal proceedings. Breach of the
UKLA Listing Rules or DTRs could result in the Company's shares
being suspended from listing which in turn would breach Section
1158. The Board relies on the services of its Company Secretary,
the Manager and its professional advisers to ensure compliance with
the Companies Act 2006, the UKLA Prospectus Rules, Listing Rules,
DTRs and the Alternative Investment Fund Managers Directive.
-- Political and Economic
Sustained underperformance of emerging markets as an asset class
as a result of risks such as the imposition of restrictions on the
free movement of capital and change in legislation. Currently,
there are UK-related risks due to the uncertain outcome of the
'Brexit' process and a possible change of Government. These risks
are discussed by the Board on a regular basis.
-- Environmental, Social and Governance
Underperformance as a result of environmental, social and
governance risks. The Board acknowledges that there are risks
associated with investment in companies which fail to conduct
business in a responsible manner and therefore, it ensures that the
Manager takes account of environmental, social and governance
factors as part of the investment process.
Transactions with the Manager and related parties
Full details of transactions with the manager and related
parties can be found in note 6 on pages 60 and 61 of the Annual
Report.
Statement of Directors' Responsibilities
The Directors are responsible for preparing the annual report
and the financial statements in accordance with applicable law and
regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law, the Directors
have elected to prepare the financial statements in accordance with
United Kingdom Generally Accepted Accounting Practice (United
Kingdom Accounting Standards and applicable law) including FRS 102
'The Financial Reporting Standard applicable in the UK and Republic
of Ireland'. Under Company law the Directors must not approve the
financial statements unless they are satisfied that, taken as a
whole, the annual report and financial statements are fair,
balanced and understandable, provide the information necessary for
shareholders to assess the Company's performance, business model
and strategy and that they give a true and fair view of the state
of affairs of the Company and of the total return or loss of the
Company for that period. In order to provide these confirmations,
and in preparing these financial statements, the Directors are
required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgements and estimates that are reasonable and prudent;
-- state whether applicable UK Accounting Standards have been
followed, subject to any material departures disclosed and
explained in the financial statements; and
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company will
continue in business.
and the Directors confirm that they have done so.
The Directors are responsible for keeping proper accounting
records that are sufficient to show and explain the Company's
transactions and disclose with reasonable accuracy at any time the
financial position of the Company and to enable them to ensure that
the financial statements comply with the Companies Act 2006. They
are also responsible for safeguarding the assets of the Company and
hence for taking reasonable steps for the prevention and detection
of fraud and other irregularities.
The financial statements are published on the
www.jpmglobalemergingmarketsincome.co.uk website, which is
maintained by the Company's Manager. The maintenance and integrity
of the website maintained by the Manager is, so far as it relates
to the Company, the responsibility of the Manager. The work carried
out by the auditors does not involve consideration of the
maintenance and integrity of this website and, accordingly, the
auditor accepts no responsibility for any changes that have
occurred to the financial statements since they were initially
presented on the website. The financial statements are prepared in
accordance with UK legislation, which may differ from legislation
in other jurisdictions.
Under applicable law and regulations the Directors are also
responsible for preparing a Directors' Report, Strategic Report and
Directors' Remuneration Report that comply with that law and those
regulations.
Each of the Directors, whose names and functions are listed on
page 21 of the Annual Report confirm that, to the best of their
knowledge:
-- the financial statements, which have been prepared in
accordance with United Kingdom Generally Accepted Accounting
Practice (United Kingdom Accounting Standards and applicable law),
give a true and fair view of the assets, liabilities, financial
position and return of the Company; and
-- the Strategic Report includes a fair review of the
development and performance of the business and the position of the
Company, together with a description of the principal risks and
uncertainties that it faces.
The Board confirms that it is satisfied that the annual report
and financial statements taken as a whole is fair, balanced and
understandable and provides the information necessary for
shareholders to assess the Company's position and performance,
business model and strategy.
For and on behalf of the Board
Sarah Fromson
Chairman
17(th) October 2019
statement of comprehensive income
for the year ended 31st July 2019
2019 2018
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------------------------------- -------- -------- -------- --------- --------- --------
Gains on investments held at fair value through profit
or loss - 33,262 33,262 - 12,019 12,019
Net foreign currency losses - (1,746) (1,746) - (674) (674)
Income from investments 22,199 - 22,199 21,358 - 21,358
Interest receivable and similar income 75 - 75 61 - 61
-------------------------------------------------------- -------- -------- -------- --------- --------- --------
Gross return 22,274 31,516 53,790 21,419 11,345 32,764
Management fee (1,257) (2,934) (4,191) (1,281) (2,988) (4,269)
Other administrative expenses (725) - (725) (740) - (740)
-------------------------------------------------------- -------- -------- -------- --------- --------- --------
Net return before finance costs and taxation 20,292 28,582 48,874 19,398 8,357 27,755
Finance costs (279) (651) (930) (231) (537) (768)
-------------------------------------------------------- -------- -------- -------- --------- --------- --------
Net return before taxation 20,013 27,931 47,944 19,167 7,820 26,987
Taxation (2,440) 195 (2,245) (2,073) - (2,073)
-------------------------------------------------------- -------- -------- -------- --------- --------- --------
Net return after taxation 17,573 28,126 45,699 17,094 7,820 24,914
-------------------------------------------------------- -------- -------- -------- --------- --------- --------
Return per share (note 2) 5.92p 9.47p 15.39p 5.78p 2.64p 8.42p
statement of changes in equity
for the year ended 31st July 2019
Called
up Capital
share Share redemption Other Capital Revenue
capital premium reserve reserve(1,2) reserves Reserve(2) Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------- -------- --------- ----------- ------------- --------- ----------- ----------
At 31st July 2017 2,943 218,497 13 101,113 51,154 11,727 385,447
Shares reissued from
Treasury - 81 - - 122 - 203
Issue of new ordinary
shares 25 3,410 - - - - 3,435
Net return - - - - 7,820 17,094 24,914
Dividends paid in
the year (note 3) - - - - - (14,485) (14,485)
----------------------- -------- --------- ----------- ------------- --------- ----------- ----------
At 31st July 2018 2,968 221,988 13 101,113 59,096 14,336 399,514
Issue of new ordinary
shares 5 594 - - - - 599
Net return - - - - 28,126 17,573 45,699
Dividends paid in
the year (note 3) - - - (508) - (14,336) (14,844)
----------------------- -------- --------- ----------- ------------- --------- ----------- ----------
At 31st July 2019 2,973 222,582 13 100,605 87,222 17,573 430,968
----------------------- -------- --------- ----------- ------------- --------- ----------- ----------
(1) The balance of the share premium was cancelled on 20th
October 2010 and transferred to the 'other reserve'.
(2) This reserve forms the distributable reserve of the Company
and may be used to fund distributions to investors via dividend
payments.
statement of financial position
at 31st July 2019
2019 2018
GBP'000 GBP'000
--------------------------------------------------------- --------- ----------
Fixed assets
Investments held at fair value through profit or loss 456,203 424,209
--------------------------------------------------------- --------- ----------
Current assets
Derivative financial assets - 8
Debtors 1,364 2,760
Cash and cash equivalents 6,314 4,275
--------------------------------------------------------- --------- ----------
7,678 7,043
Current liabilities
Creditors: amounts falling due within one year (245) (1,244)
--------------------------------------------------------- --------- ----------
Net current assets 7,433 5,799
--------------------------------------------------------- --------- ----------
Total assets less current liabilities 463,636 430,008
Creditors: amounts falling due after more than one year (32,668) (30,494)
--------------------------------------------------------- --------- ----------
Net assets 430,968 399,514
--------------------------------------------------------- --------- ----------
Capital and reserves
Called up share capital 2,973 2,968
Share premium 222,582 221,988
Capital redemption reserve 13 13
Other reserve 100,605 101,113
Capital reserves 87,222 59,096
Revenue reserve 17,573 14,336
--------------------------------------------------------- --------- ----------
Total shareholders' funds 430,968 399,514
--------------------------------------------------------- --------- ----------
Net asset value per share 145.0p 134.6p
statement of cash flows
For the year ended 31st July 2019
2019 2018
GBP'000 GBP'000
---------------------------------------------------------------- --------- -----------
Net cash outflow from operations before dividends and interest (4,547) (5,515)
Dividends received 20,832 18,467
Interest received 69 59
Overseas tax recovered - 28
Interest paid (880) (768)
---------------------------------------------------------------- --------- -----------
Net cash inflow from operating activities 15,474 12,271
---------------------------------------------------------------- --------- -----------
Purchases of investments (59,570) (150,252)
Sales of investments 60,316 151,535
Settlement of forward currency contracts 48 (29)
---------------------------------------------------------------- --------- -----------
Net cash inflow from investing activities 794 1,254
---------------------------------------------------------------- --------- -----------
Dividends paid (14,844) (14,485)
Shares reissued from Treasury - 203
Issue of new ordinary shares 599 3,435
Repayment of bank loans - (14,994)
Drawdown of bank loans - 14,994
---------------------------------------------------------------- --------- -----------
Net cash outflow from financing activities (14,245) (10,847)
---------------------------------------------------------------- --------- -----------
Increase in cash and cash equivalents 2,023 2,678
---------------------------------------------------------------- --------- -----------
Cash and cash equivalents at start of year 4,275 1,605
Exchange movements 16 (8)
Cash and cash equivalents at end of year 6,314 4,275
---------------------------------------------------------------- --------- -----------
Increase in cash and cash equivalents 2,023 2,678
---------------------------------------------------------------- --------- -----------
Cash and cash equivalents consist of:
Cash and short term deposits 2,185 2,062
Cash held in JPMorgan US Dollar Liquidity Fund 4,129 2,213
---------------------------------------------------------------- --------- -----------
Total 6,314 4,275
---------------------------------------------------------------- --------- -----------
Notes to the financial statements
for the year ended 31st July 2019
1. Accounting policies
Basis of accounting
The financial statements are prepared under the historical cost
convention, modified to include fixed asset investments at fair
value, and in accordance with the Companies Act 2006, United
Kingdom Generally Accepted Accounting Practice ('UK GAAP'),
including FRS 102 'The Financial Reporting Standard applicable in
the UK and Republic of Ireland' and with the Statement of
Recommended Practice 'Financial Statements of Investment Trust
Companies and Venture Capital Trusts' (the 'SORP') issued by the
Association of Investment Companies in November 2014 and updated in
February 2018.
All of the Company's operations are of a continuing nature.
The policies applied in these financial statements are
consistent with those applied in the preceding year.
2. Return per share
2019 2018
GBP'000 GBP'000
------------------------------------------------------------ ------------ ------------
Revenue return 17,573 17,094
Capital return 28,126 7,820
------------------------------------------------------------ ------------ ------------
Total return 45,699 24,914
------------------------------------------------------------ ------------ ------------
Weighted average number of shares in issue during the year 296,892,079 295,938,380
Revenue return per share 5.92p 5.78p
Capital return per share 9.47p 2.64p
------------------------------------------------------------ ------------ ------------
Total return per share 15.39p 8.42p
------------------------------------------------------------ ------------ ------------
3. Dividends
Dividends paid and declared
2019 2018
GBP'000 GBP'000
-------------------------------------------------------- -------- --------
Dividend paid
2018 Fourth interim dividend paid of 2.0p (2017: 1.9p) 5,936 5,589
First interim dividend paid of 1.0p (2018: 1.0p) 2,968 2,960
Second interim dividend paid of 1.0p (2018: 1.0p) 2,968 2,968
Third interim dividend paid of 1.0p (2018: 1.0p) 2,972 2,968
-------------------------------------------------------- -------- --------
Total dividends paid in the year 14,844 14,485
-------------------------------------------------------- -------- --------
Dividend declared
Fourth interim dividend declared of 2.1p (2018: 2.0p) 6,242 5,936
-------------------------------------------------------- -------- --------
4. Net asset value per share
2019 2018
--------------------------- ------------ -------------
Net assets (GBP'000) 430,968 399,514
Number of shares in issue 297,240,161 296,790,161
--------------------------- ------------ -------------
Net asset value per share 145.0p 134.6p
--------------------------- ------------ -------------
5. Status of announcement
2018 Financial Information
The figures and financial information for 2018 are extracted
from the Annual Report and Accounts for the year ended 31st July
2018 and do not constitute the statutory accounts for that year.
The Annual Report and Accounts has been delivered to the Registrar
of Companies and included the Report of the Independent Auditors
which was unqualified and did not contain a statement under either
section 498(2) or section 498(3) of the Companies Act 2006.
2019 Financial Information
The figures and financial information for 2019 are extracted
from the Annual Report and Accounts for the year ended 31st July
2019 and do not constitute the statutory accounts for that year.
The Annual Report and Accounts includes the Report of the
Independent Auditors which is unqualified and does not contain a
statement under either section 498(2) or section 498(3) of the
Companies Act 2006. The Annual Report and Accounts will be
delivered to the Registrar of Companies in due course.
Neither the contents of the Company's website nor the contents
of any website accessible from hyperlinks on the Company's website
(or any other website) is incorporated into, or forms part of, this
announcement.
JPMORGAN FUNDS LIMITED
17th October 2019
For further information please contact:
Divya Amin
For and on behalf of
JPMorgan Funds Limited
020 7742 4000
ENDS
A copy of the Annual Report will shortly be submitted to the
National Storage Mechanism and will be available for inspection at
www.morningstar.co.uk/uk/NSM The Annual Report will also be
available on the Company's website at
www.jpmorganglobalemergingmarkets.co.uk where up to date
information on the Company, including daily NAV and share prices,
factsheets and portfolio information can also be found.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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