TIDMJMI
RNS Number : 9938T
JPMorgan Smaller Cos IT PLC
18 October 2017
LONDON STOCK EXCHANGE ANNOUNCEMENT
JPMORGAN SMALLER COMPANIES INVETMENT TRUST PLC
(the 'Company')
FINAL RESULTS FOR THE YEARED 31ST JULY 2017
Legal Entity Identifier: 549300PXALXKUMU9JM18
Information disclosed in accordance with DTR 4.2.2
The Directors announce the Company's results for the year ended
31st July 2017.
CHAIRMAN'S STATEMENT
Investment Performance
Investment returns were strong in the financial year to 31st
July 2017 in marked contrast to the previous year. Despite
political surprises at home and abroad, underlying improvements in
economic conditions led to steadily rising equity markets. The
Company's total return on net assets was +31.0%, compared with
+23.4% recorded by the benchmark index. The return to Ordinary
shareholders was +28.7% reflecting a widening of the share price
discount to diluted net asset value from 20.5% to 22.3%. This
outperformance is particularly welcome in the light of last year's
underperformance.
It is encouraging to note that since the year end, performance
has continued to improve, with the Company's net asset value per
share (before dilution) increasing 4.8% to 1,270.2p, and the share
price 8.4% to 1,021.0p at 13th October 2017. By comparison, the
Company's benchmark has risen 0.88%. The current level of discount
is 19.6%.
As set out in the Long-Term Performance table on in the Annual
Report and Accounts, although the Company underperformed its
benchmark over the 3 and 5 year periods, it retains its strong 10
year record, outperforming by 27.3 percentage points.
In their report, the Investment Managers have provided further
detail on portfolio performance and attribution, together with a
commentary on markets.
Revenue and Dividends
The revenue return per share, calculated on the average number
of shares in issue, increased significantly to 24.24p (2016:
18.31p). This improvement is a combination of companies increasing
their dividends and changes in the composition of the portfolio.
The Directors are recommending a final dividend of 23.0p per share,
25.7% higher than the 18.3p paid last year. If approved, the
dividend will be paid on 8th December 2017 to shareholders on the
register at close of business on 10th November 2017.
The level of income received each year varies according to
economic conditions, the Company's investment stance and gearing.
It is our policy to distribute substantially all the available
income each year, and shareholders should note that dividends may
vary accordingly.
Gearing
Gearing is regularly discussed between the Board and the
Manager. A borrowing facility of GBP25 million with Scotiabank is
in place until April 2018. This is highly flexible and is used with
the aim of enhancing long-term returns at the cost of a small
increase in volatility. There is a further option to increase
borrowings to GBP35 million subject to certain conditions. At the
year end, GBP22 million (2016: GBP19 million) was drawn on the
facility with the gearing level of 8.1% (2016: 5.7%) of net assets.
Since the year-end gearing has decreased, and as of 13th October
2017 was 7.2%.
Share Repurchases and Issuance
At last year's Annual General Meeting ('AGM'), shareholders
granted the Directors authority to repurchase the Company's shares
for cancellation. During the financial year the Company repurchased
689,992 Ordinary shares for a total consideration of GBP5,906,000,
representing 4.1% of the issued Ordinary share capital at the
beginning of the year.
The Board's objective remains to use this authority to manage
imbalances between the supply and demand of the Company's shares,
with the intention of reducing the volatility of the discount. To
date the Board believes this mechanism has been helpful and
therefore proposes and recommends that powers to repurchase up to
14.99% of the Company's shares for cancellation be renewed.
During the year, 859,774 Ordinary shares were issued upon
exercise of Subscription shares, giving a total consideration
received of GBP7,867,000. On 14th July 2017, the Company announced
that a Final Subscription Trustee had been appointed to act on
behalf of those Subscription Shareholders who had not exercised
their Subscription Share Rights on or by the Final Subscription
Date, representing a total of 2,695,905 Subscription Shares. These
Subscription Shares were redesignated as Deferred Shares and were
then repurchased by the Company for a nominal value and cancelled
in accordance with the terms of the Subscription Shares. In the
days immediately prior to the final subscription share exercise
date, the shares unfortunately traded below the exercise price,
despite having traded above in the month before and after the
exercise date.
Since the year end, and as at the date of this report, an
additional 68,432 shares were repurchased for cancellation. The
Company's issued share capital now comprises 17,031,374 Ordinary
Shares and nil Subscription Shares.
Board of Directors and Corporate Governance
Ivo Coulson will retire from the Board immediately after the
forthcoming AGM. Accordingly, he will not stand for reappointment
at that meeting. Ivo has served as a non-executive Director of the
Company since 2005 and the Board is very grateful to him for his
valuable contribution during his tenure.
As part of the Board's succession planning, the Nomination
Committee carried out a search process using an independent
recruitment consultancy which led to the appointment of Alice Ryder
as an independent non-executive Director with effect from 1st
February 2017. Alice has more than 25 years of investment
experience, a good part of which included the management of smaller
UK companies, and the Board is already benefiting from her
contribution. We will continue to refresh the Board's composition
in an orderly manner and developments will be reported as
appropriate.
In accordance with corporate governance best practice, all
Directors will stand for reappointment at the forthcoming AGM.
Shareholders who wish to contact the Chairman or other members
of the Board directly may do so through the Company Secretary or
the Company's website.
Continuation of the Company
The Company's Articles of Association require that shareholders
vote on the continuation of the Company at every third AGM. The
seventh of these votes falls this year. The Board has evaluated the
performance and progress of the Company over the last year and, in
particular, the three years since the last continuation vote was
passed.
Over the last three years, the total return from the Company's
net assets has been +39.0%, compared with a +39.3% return on its
benchmark, the FTSE Small Cap Index (excluding investment trusts).
During the last twelve months, the Board has undertaken a detailed
review of the Manager and their approach, and challenged them on
past periods of underperformance. Whilst there has been a marginal
level of underperformance over the last three years, the Board has
accepted that this is consistent with the Manager's style and
approach, and is part of the cyclical nature of markets. The Board
has encouraged the Manager to place greater commitment behind their
best ideas, and to this end has decided to increase the stock,
sector and underwriting limits to ensure that these are not an
impediment to backing their judgement.
The Directors believe that long-term investment in UK smaller
companies should deliver strong average returns, and that the
Company provides access to investments that individual investors
would find difficult to replicate on their own. Whilst all
investment approaches will deliver cyclical returns, the Board
believes that the Manager's approach continues to be appropriate
for the Company. The Board therefore recommends that shareholders
vote in favour of the resolution at the AGM on 28th November 2017,
as the Directors intend to do so in respect of their own
holdings.
Annual General Meeting
The Company's twenty seventh AGM will be held on Tuesday, 28th
November 2017 at 3.00 p.m. at 60 Victoria Embankment, London EC4Y
0JP. In addition to the formal part of the meeting, there will be a
presentation from the Investment Manager who will answer questions
on the portfolio and performance. Shareholders who are unable to
attend the AGM in person are encouraged to use their proxy
votes.
Outlook
Domestic considerations are dominated by negotiations over our
withdrawal from the EU, and their ebb and flow will affect the
sentiment of investors and companies alike. Inevitably this will
result in greater than normal volatility in market levels until
arrangements are settled. Despite this uncertainty, well managed,
high quality smaller companies can innovate, develop and grow, and
deliver strong returns. By giving access to these opportunities,
the Board believes that the Company is attractive for long-term
investors.
Michael Quicke OBE
Chairman
18th October 2017
INVESTMENT MANAGERS' REPORT
Performance & Market Background
The last twelve months have seen very strong returns for the UK
stock market. In part this was due to the rebound following the
significant market falls in June 2016 post the Referendum. This was
also due to the resilience of the UK economy post the vote. To
date, the economy has disproved the doomsayers, (although this may
be because as yet nothing has fundamentally changed, aside from a
decrease in the value of sterling and an increase in volatility),
and this has outweighed wider political concerns. These wider
political concerns include the recent UK election, the US election
of Donald Trump, the French election, the triggering of article 50
in the UK and the growing nuclear threat by the North Koreans, to
name but some of the tumultuous events of the last 12 months.
Despite this backdrop, over the year the FTSE Small Cap (ex
Investment Trusts) Index rose by 23.4%. We are very pleased to
report that the Company significantly outperformed its benchmark in
this period and provided a total return on net assets of 31.0%.
Portfolio
The key to the Company's outperformance over the year was stock
selection. It is pleasing to be able to report that the process by
which we invest, and the factors we focus on, have produced strong
returns, after last year's disappointment. Among the strongest
performers were our large positions in both Fevertree Drinks and
OneSavings Bank (both of which we have owned since the initial
public offering ('IPO')). Other strong contributors included our
holding in Victoria, the carpet manufacturer, and a more recent
purchase, Microgen, a software company. On the negative side, two
of our main detractors, Plus500 and NAHL, were both hit by
regulatory changes (although it should be noted that we have made
over nine times our original investment at IPO in Plus500).
We made significant changes to the portfolio following the
Referendum vote. This can be seen in the portfolio analysis in the
Annual Report and Accounts. Most notable are the move from
underweight to very overweight in the Industrials sector, and
conversely the move from a large overweight to underweight in the
Consumer Services sector, as we focussed more on overseas earners
and exporters, and underweighted the UK consumer.
Corporate activity, by which we mean take-overs, placings and
IPOs (or new companies floating on the market), has played a big
part in the last year. The Company has benefitted from take-overs
in Cape, Novae, Lavendon, Exova, Ithaca Energy and 32Red this year.
At the same time we have made new investments into a number of IPOs
and placings, including Eddie Stobart (the eponymous logistics
company), Luceco (LED lighting) and Quiz (an online and offline
fashion clothing retailer).
Lastly, it would be remiss not to mention the increase in our
AIM holdings, following the approval granted at our last AGM to
increase significantly the guideline limit. At our last AGM
approximately 18% of the fund was invested in AIM-listed companies.
At the time of writing we now have 23%, despite both Ithaca Energy
and 32Red being taken over, as mentioned above. New additions over
the period include Keywords Studios (a service provider to the
video gaming industry), ULS Technology (conveyancing solutions) and
Nexus Infrastructure (an infrastructure play on new homebuilding) -
to name but some.
Outlook
The outlook for the UK economy is mixed. It is all too easy to
paint a gloomy picture in the short-term. Consumer confidence is
down, consumer spending is down, GDP forecasts have recently been
reduced, and business investment is down. Add to this rising
inflation and rising consumer debt levels, all against the backdrop
of a destabilising UK election which provided a minority
Government, and a further 18 months of Brexit negotiations.
However, few of these are surprises (bar the election outcome).
On the positive side, it is clear that interest rates will continue
to remain accommodating for some time to come. Unemployment is at a
40 year low at 4.3% and the employment rate (the proportion of
people of working age who are in employment) is over 75%, which is
the highest figure since records began in 1971. Foreign direct
investment into the UK continues to be strong; and as predicted,
our weakened currency is proving a boon to UK exporters.
As discussed above, we believe we have repositioned the
portfolio to take advantage of these positives and reduced our
exposure to the potential negatives. We have emphasised the niche
growth companies in the portfolio, which we believe to be
relatively immune from the economic backdrop, and significantly
reduced our exposure to the more consumer-facing companies.
Post the Referendum vote, the smaller companies arena has been
extremely sanguine regarding the eventual outcome. While this might
raise questions as the eventual outcome is debated and negotiated,
a number of factors give us comfort. First and foremost are
valuations for smaller companies - the index remains compelling at
12.9x P/E ratio (12 month forward number). Secondly, as mentioned
above, the amount of M&A we have seen within the portfolio over
the last year provides a strong level of comfort - acquirers
clearly see value at this level. And lastly, we would continue to
stress that a significant benefit of smaller companies is their
comparative immunity to the broader economy. Niche growth companies
should be able to continue to grow, and grow significantly,
whatever the backdrop, as many of our companies continually
demonstrate. We believe we have positioned ourselves to benefit
from the growth of such companies and also believe that we will
continue to see and hopefully benefit from further M&A.
Georgina Brittain
Katen Patel
Investment Managers
18th October 2017
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 completed a
robust risk assessment and 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
remain unchanged since last year and fall broadly under the
following categories:
-- Investment and Strategy: An inappropriate investment
strategy, for example asset allocation or the level of gearing, may
lead to under-performance against the Company's benchmark index and
peer companies, resulting in the Company's shares trading on a
wider discount. The Board manages these risks by diversification of
investments through its investment restrictions and guidelines
which are monitored and reported on. The Manager provides the
Directors with timely and accurate management information,
including performance data and attribution analyses, revenue
estimates, liquidity reports and shareholder analyses. The Board
monitors the implementation and results of the investment process
with the Investment Manager, who attend Board meetings, and reviews
data which shows statistical measures of the Company's risk
profile. The Investment Manager employs the Company's gearing,
within a strategic range set by the Board.
-- Discount: A disproportionate widening of the discount
relative to the Company's peers could result in loss of value for
shareholders. The Board regularly discusses discount management
policy and has set parameters for the Manager and the Company's
broker to follow.
-- Smaller Company Investment: Investing in smaller companies is
inherently more risky and volatile, partly due to lack of liquidity
in some shares, plus AIM stocks are less regulated. The Board
discusses these risk factors regularly at each Board meeting with
the Investment Managers. The Board has placed investment
restrictions and guidelines to limit these risks.
-- Political and Economic: Changes in financial or tax
legislation, including in the European Union, and the impact of the
EU Referendum result, may adversely affect the Company. The Manager
makes recommendations to the Board on accounting, dividend and tax
policies, and seeks external advice where appropriate.
-- 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 Statement on pages 25 to 28 of the
Annual Report. The Board receives regular reports from the Manager
and the Company's broker about shareholder communications, their
views and their activity.
-- Market: Market risk arises from uncertainty about the future
prices of the Company's investments. It represents the potential
loss that the Company might suffer through holding investments in
the face of negative market movements. The Board considers asset
allocation, stock selection and levels of gearing on a regular
basis and has set investment restrictions and guidelines, which are
monitored and reported on by the Manager. The Board monitors the
implication and results of the investment process with the
Manager.
-- Accounting, Legal and Regulatory: In order to qualify as an
investment trust, the Company must comply with Section 1158 of the
Income and Corporation Tax Act 2010 ('Section 1158'). Details of
the Company's approval are given under 'Business of the Company'
above. Should the Company breach Section 1158, it may lose its
investment trust status and as a consequence capital gains within
the Company's portfolio would 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, as its shares are listed on the London Stock Exchange,
the UKLA Listing Rules and Disclosure and Transparency Rules
('DTRs'). A breach of the Companies Act 2006 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 may 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, JPMorgan Funds Limited, and its professional
advisers to monitor compliance with all relevant requirements.
-- Operational and Cybercrime: Disruption to, or failure of, the
Manager's accounting, dealing or payments systems or the
depositary's or custodian's records may prevent accurate reporting
and monitoring of the Company's financial position. On 1st July
2014, the Company appointed BNY Mellon Trust & Depositary (UK)
Limited to act as the depositary, responsible for overseeing the
operations of the custodian, JPMorgan Chase Bank, N.A., and the
Company's cash flows. Details of how the Board monitors the
services provided by the Manager, its associates and depositary and
the key elements designed to provide effective internal control are
included within the Risk Management and Internal Control section of
the Directors' Report on pages 27 and 28 of the Annual Report. The
threat of cyber attack, in all its guises, is regarded as at least
as important as more traditional physical threats to business
continuity and security. The Company benefits directly or
indirectly from all elements of JPMorgan's Cyber Security
programme. The information technology controls around the physical
security of JPMorgan's data centres, security of its networks and
security of its trading applications are tested independently.
-- Financial: The financial risks faced by the Company include
market price risk, interest rate risk, liquidity risk and credit
risk. Counterparties are subject to daily credit analysis by the
Manager and regular consideration at meetings of the Board. In
addition the Board receives reports on the Manager's monitoring and
mitigation of credit risks on share transactions carried out by the
Company. Further details are disclosed in note 21 on pages 58 to 60
of the Annual Report.
RELATED PARTY TRANSACTIONS
During the financial year, no transactions with related parties
have taken place which have materially affected the financial
position or the performance of the Company during the year.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors are responsible for preparing the annual report
and the accounts 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). Under Company law
the Directors must not approve the financial statements unless they
are satisfied that, taken as a whole, the Annual Report and
Accounts 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.
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 accounts are published on the www.jpmsmallercompanies.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 auditor 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 accounts since they were initially
presented on the website. The accounts 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
pages 21 and 22 of the Annual Report confirm that, to the best of
their knowledge:
-- the financial statements, which have been prepared in
accordance with United Kingdom Accounting Standards, comprising FRS
102 'The Financial Reporting Standard applicable in the United
Kingdom and Republic of Ireland', and applicable law (United
Kingdom Generally Accepted Accounting Practice) give a true and
fair view of the assets, liabilities, financial position and return
or loss 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 accounts taken as a whole are fair, balanced and understandable
and provides the information necessary for shareholders to assess
the Company's position, performance, business model and
strategy.
For and on behalf of the Board
Michael Quicke OBE
Chairman
18th October 2017
FINANCIAL STATEMENTS
STATEMENT OF COMPREHENSIVE INCOME FOR THE YEARED 31ST JULY
2017
2017 2016
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------- -------- --------- --------- -------- ---------- ----------
Gains/(losses) on investments
held at
fair value through profit
or loss - 44,934 44,934 - (16,063) (16,063)
Net foreign currency gains - 22 22 - 5 5
Income from investments 5,133 - 5,133 4,263 - 4,263
Interest receivable and
similar income 50 - 50 21 - 21
------------------------------- -------- --------- --------- -------- ---------- ----------
Gross return/(loss) 5,183 44,956 50,139 4,284 (16,058) (11,774)
Management fee (474) (1,106) (1,580) (463) (1,081) (1,544)
Other administrative expenses (452) - (452) (487) - (487)
------------------------------- -------- --------- --------- -------- ---------- ----------
Net return/(loss) on ordinary
activities
before finance costs
and taxation 4,257 43,850 48,107 3,334 (17,139) (13,805)
Finance costs (66) (154) (220) (82) (192) (274)
------------------------------- -------- --------- --------- -------- ---------- ----------
Net return/(loss) on ordinary
activities
before taxation 4,191 43,696 47,887 3,252 (17,331) (14,079)
Taxation (141) - (141) (114) - (114)
------------------------------- -------- --------- --------- -------- ---------- ----------
Net return/(loss) on ordinary
activities
after taxation 4,050 43,696 47,746 3,138 (17,331) (14,193)
------------------------------- -------- --------- --------- -------- ---------- ----------
Return/(loss) per share
- undiluted (note 3) 24.24p 261.48p 285.72p 18.31p (101.14)p (82.83)p
Return/(loss) per share
- diluted(1) (note 3) 24.24p 261.48p 285.72p 18.31p (101.14)p (82.83)p
(1) As at 31st July 2017 there was no dilution effect as the
rights attached to the Subscription shares lapsed during the year.
As at 31st July 2016, the Subscription
shares had no dilutive effect as the conversion price for these
shares exceeded the average market price of the Ordinary shares
from the date of issue to 31st July 2016.
A final dividend of 23.0p per share (2016: 18.3p per share) is
proposed in respect of the year ended 31st July 2017 amounting
to
GBP3,933,000 (2016: GBP3,098,000). Further information on
dividends is given in note 2.
All revenue and capital items in the above statement derive from
continuing operations.
The 'Total' column of this statement is the profit and loss
account of the Company and the 'Revenue' and 'Capital' columns
represent
supplementary information prepared under guidance issued by the
Association of Investment Companies. Net return/(loss) on ordinary
activities after taxation represents the profit/(loss) for the year
and also Total Comprehensive Income.
STATEMENT OF CHANGES IN EQUITY FOR THE YEARED 31ST JULY 2017
Called Capital
up
share Share redemption Capital Revenue
capital premium reserve reserves Reserve Total
(1)
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------ -------- -------- ----------- ---------- --------- ----------
At 31st July 2015 4,324 18,190 2,347 151,286 3,450 179,597
Repurchase and cancellation
of the
Company's own shares (90) - 90 (2,936) - (2,936)
Issue of Ordinary shares
on exercise of
Subscription shares 2 52 - - - 54
Net (loss)/return on
ordinary activities - - - (17,331) 3,138 (14,193)
Dividend paid in the
year - - - - (1,889) (1,889)
------------------------------ -------- -------- ----------- ---------- --------- ----------
At 31st July 2016 4,236 18,242 2,437 131,019 4,699 160,633
Repurchase and cancellation
of the
Company's own shares (172) - 172 (5,906) - (5,906)
Conversion of Subscription
shares into
Ordinary shares (1) 1 - - - -
Issue of Ordinary shares
on exercise of
Subscription shares 215 7,652 - - - 7,867
Cancellation of Subscription
Shares (3) - - 3 - -
Net return on ordinary
activities - - - 43,696 4,050 47,746
Dividends paid in the
year - - - - (3,055) (3,055)
------------------------------ -------- -------- ----------- ---------- --------- ----------
At 31st July 2017 4,275 25,895 2,609 168,812 5,694 207,285
------------------------------ -------- -------- ----------- ---------- --------- ----------
(1) This reserve forms the distributable reserve of the Company
and may be used to fund distribution of profits to investors via
dividend payments.
STATEMENT OF FINANCIAL POSITION AT 31ST JULY 2017
2017 2016
GBP'000 GBP'000
------------------------------------------------- ---------- ---------
Fixed assets
Investments held at fair value through profit
or loss 224,092 169,806
Current assets
Debtors 738 485
Cash and cash equivalents 8,649 10,575
------------------------------------------------- ---------- ---------
9,387 11,060
Current liabilities
Creditors: amounts falling due within one
year (26,194) (20,233)
------------------------------------------------- ---------- ---------
Net current liabilities (16,807) (9,173)
------------------------------------------------- ---------- ---------
Total assets less current liabilities 207,285 160,633
------------------------------------------------- ---------- ---------
Net assets 207,285 160,633
------------------------------------------------- ---------- ---------
Capital and reserves
Called up share capital 4,275 4,236
Share premium 25,895 18,242
Capital redemption reserve 2,609 2,437
Capital reserves 168,812 131,019
Revenue reserve 5,694 4,699
------------------------------------------------- ---------- ---------
Total shareholders' funds 207,285 160,633
------------------------------------------------- ---------- ---------
Net asset value per Ordinary share - undiluted 1,212.2p 948.8p
Net asset value per Ordinary share - diluted(1) 1,212.2p 942.9p
(1) As at 31st July 2017 there was no dilution effect as the
rights attached to the Subscription shares lapsed during the
year.
STATEMENT OF CASH FLOWS FOR THE YEARED 31ST JULY 2017
2017 2016
GBP'000 GBP'000
------------------------------------------------------ ---------- ---------
Net cash outflow from operations before dividends
and interest (1,956) (2,041)
Dividends received 4,696 3,902
Interest received 21 17
Interest paid (220) (278)
Taxation 2 1
------------------------------------------------------ ---------- ---------
Net cash inflow from operating activities 2,543 1,601
------------------------------------------------------ ---------- ---------
Purchases of investments (77,062) (78,352)
Sales of investments 70,724 87,897
Settlement of foreign currency contracts (2) 6
------------------------------------------------------ ---------- ---------
Net cash (outflow)/inflow from investing activities (6,340) 9,551
------------------------------------------------------ ---------- ---------
Dividends paid (3,055) (1,889)
Repurchase and cancellation of the Company's
own shares (5,941) (2,574)
Issue of Ordinary shares on exercise of Subscription
shares 7,867 54
Drawdown of loans 3,000 -
------------------------------------------------------ ---------- ---------
Net cash inflow/(outflow) from financing activities 1,871 (4,409)
------------------------------------------------------ ---------- ---------
(Decrease)/increase in cash and cash equivalents (1,926) 6,743
------------------------------------------------------ ---------- ---------
Cash and cash equivalents at start of year 10,575 3,832
Cash and cash equivalents at end of year 8,649 10,575
------------------------------------------------------ ---------- ---------
(Decrease)/increase in cash and cash equivalents (1,926) 6,743
------------------------------------------------------ ---------- ---------
Cash and cash equivalents consist of:
Cash and short-term deposits 370 249
Cash held in JPMorgan Sterling Liquidity Fund 8,279 10,326
------------------------------------------------------ ---------- ---------
Total 8,649 10,575
------------------------------------------------------ ---------- ---------
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARED 31ST JULY
2017
1. Accounting policies
(a) 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 'the Financial Reporting Standard applicable in the UK
and Republic of Ireland' ('FRS 102') 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
January 2017.
All of the Company's operations are of a continuing nature.
The financial statements have been prepared on a going concern
basis. The disclosures on going concern on page 29 of the Annual
Report form part of these financial statements.
The policies applied in these financial statements are
consistent with those applied in the preceding year.
2. Dividends
(a) Dividends paid and proposed
2017 2016
GBP'000 GBP'000
---------------------------------------------- -------- --------
Dividend paid
2016 final dividend of 18.3p (2015: 11.0p)
per share 3,055 1,889
---------------------------------------------- -------- --------
Dividend proposed
2017 final dividend proposed of 23.0p (2016:
18.3p) per share 3,933 3,098
---------------------------------------------- -------- --------
All dividends paid and proposed in the period have been and will
be funded from the revenue reserve.
The dividend proposed in respect of the year ended 31st July
2016 amounted to GBP3,098,000. However the amount paid amounted to
GBP3,055,000 due to shares repurchased after the balance sheet date
but prior to the share register record date.
The dividend proposed in respect of the year ended 31st July
2017 is subject to shareholder approval at the forthcoming AGM. In
accordance with the accounting policy of the Company, this dividend
will be reflected in the financial statements for the year ending
31st July 2018.
(b) Dividend for the purposes of Section 1158 of the Corporation Tax Act 2010 ('Section 1158')
The requirements of Section 1158 are considered on the basis of
dividends declared in respect of the financial year, shown below.
The revenue available for distribution by way of dividend for the
year is GBP4,050,000 (2016: GBP3,138,000). The revenue reserve
after payment of the final dividend will amount to GBP1,761,000
(2016: GBP1,601,000).
2017 2016
GBP'000 GBP'000
--------------------------------------- -------- --------
Final dividend of 23.0p (2016: 18.3p)
per share 3,933 3,098
--------------------------------------- -------- --------
3. Return/(loss) per share
2017 2016
GBP'000 GBP'000
---------------------------------------------- ------------- -------------
Revenue return 4,050 3,138
Capital return/(loss) 43,696 (17,331)
---------------------------------------------- ------------- -------------
Total return/(loss) 47,746 (14,193)
---------------------------------------------- ------------- -------------
Weighted average number of shares in
issue during the year used for the purposes
of the undiluted calculation 16,710,754 17,136,321
Weighted average number of shares in
issue during the year used for the purposes
of the diluted calculation 16,710,754 17,136,321
Undiluted
Revenue return per share 24.24p 18.31p
Capital return/(loss) per share 261.48p (101.14)p
---------------------------------------------- ------------- -------------
Total return/(loss) per share 285.72p (82.83)p
---------------------------------------------- ------------- -------------
Diluted(1,2)
Revenue return per share 24.24p 18.31p
Capital return/(loss) per share 261.48p (101.14)p
---------------------------------------------- ------------- -------------
Total return/(loss) per share 285.72p (82.83)p
---------------------------------------------- ------------- -------------
(1) As at 31st July 2017 there was no dilution effect as the
rights attached to the Subscription shares lapsed during the
year.
(2) As at 31st July 2016, the Subscription shares had no
dilutive effect as the conversion price for these shares exceeded
the average market price of the Ordinary shares from the date of
issue to 31st July 2016.
The diluted return/(loss) per share represents the return/(loss)
on ordinary activities after taxation divided by the weighted
average number of Ordinary shares in issue during the year as
adjusted in accordance with IAS 33, as required by FRS 102.
4. Net asset value per share
2017 2016
---------------------------------------- ----------- -----------
Undiluted
Net assets (GBP'000) 207,285 160,633
Number of shares in issue 17,099,806 16,930,024
---------------------------------------- ----------- -----------
Net asset value per Ordinary share 1,212.2p 948.8p
---------------------------------------- ----------- -----------
Diluted(1)
Net assets (GBP'000) 207,285 193,168
Number of potential Ordinary shares in
issue 17,099,806 20,485,703
Net asset value per Ordinary share 1,212.2p 942.9p
---------------------------------------- ----------- -----------
(1) As at 31st July 2017 there was no dilution effect as the
rights attached to the Subscription shares lapsed during the
year.
5. Status of results announcement
2016 Financial Information
The figures and financial information for 2016 are extracted
from the Annual Report and Accounts for the year ended 30th June
2016 and do not constitute the statutory accounts for the year. The
Annual Report and Accounts include 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.
2017 Financial Information
The figures and financial information for 2017 are extracted
from the published Annual Report and Accounts for the year ended
30th June 2017 and do not constitute the statutory accounts for
that year. The Annual Report and Accounts will be delivered to the
Registrar of Companies in due course and includes 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.
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
18th October 2017
For further information, please contact:
Divya Amin
For and on behalf of
JPMorgan Funds Limited
020 7742 4000
ENDS
A copy of the half year will be submitted to the National
Storage Mechanism and will shortly be available for inspection at
www.morningstar.co.uk/uk/NSM
The half year will also shortly be available on the Company's
website at www.jpmsmallercompanies.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 company news service from the London Stock Exchange
END
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