TIDMJMI
RNS Number : 0842E
JPMorgan Smaller Cos IT PLC
15 October 2018
LONDON STOCK EXCHANGE ANNOUNCEMENT
JPMORGAN SMALLER COMPANIES INVETMENT TRUST PLC
(the 'Company')
FINAL RESULTS FOR THE YEARED 31ST JULY 2018
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 2018
CHAIRMAN'S STATEMENT
Investment Performance
Shareholders enjoyed very strong returns in the financial year
to 31st July 2018, with significant outperformance against the
benchmark being combined with a tightening of the discount to net
asset value. This second consecutive year of outperformance has
more than compensated for earlier periods of underperformance,
demonstrating the importance of a longer-term perspective when
investing in smaller companies. The Company's total return on net
assets was +19.7%, compared with +2.1% recorded by the benchmark
index. The return to Ordinary shareholders was +31.8% reflecting a
narrowing of the share price discount to net asset value from 22.3%
to 14.7%.
Unfortunately, the Company has given up some of these gains
since the year end. As at 11th October 2018, net asset value per
share has decreased by 11.0% compared with a 6.6% reduction in the
benchmark. As a result of a widening of the discount to 17.2%, the
share price has fallen by 13.6% to 1,050.0p.
The experience over the last two years has resulted in the
Company delivering very attractive absolute returns as well as
outperforming its benchmark over the 3, 5 and 10 year periods.
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 30.69p (2017:
24.24p). This improvement is a combination of companies increasing
their dividends, a higher level of special dividends and changes in
the composition of the portfolio. The Directors are recommending a
final dividend of 27.0p per share, 17.4% higher than the 23.0p paid
last year. If approved, the dividend will be paid on 7th December
2018 to shareholders on the register at close of business on 9th
November 2018.
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 2019. 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, GBP25 million (2017: GBP22 million) was drawn on the
facility with the gearing level of 9.1% (2017: 8.1%) of net assets.
Since the year-end gearing has increased, and as of 11th October
2018 was 9.9%.
Shareholders will note that on the 20th September 2018 we
announced that we were considering the possibility of issuing
convertible unsecured loan stock in order to provide the Company
with structural, long term gearing and the potential to grow the
Company in future upon conversion into ordinary shares.
We will consult with shareholders on the matter and will make a
further announcement in due course based on their responses. If a
convertible unsecured loan stock is issued, part of the proceeds
will be used to repay our current borrowing facility.
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
1,161,205 Ordinary shares for a total consideration of
GBP12,007,000 representing 6.8% of the issued Ordinary share
capital at the beginning of the year. Going forward, any shares
repurchased will either be cancelled or held in Treasury for
possible re-issue. Treasury shares or new Ordinary shares will only
be sold or issued respectively at a premium to net asset value.
The Board's objective remains to use the repurchase 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 (less shares held
in Treasury) be renewed.
Since the year end, and as at the date of this report, an
additional 11,319 shares were repurchased for cancellation. The
Company's issued share capital now comprises 15,927,282 Ordinary
Shares.
Board of Directors and Corporate Governance
During the year, the Board employed Lintstock to facilitate an
evaluation of the Board and its Committees including a review of
chair succession. Following consideration of the results of this
review, the Nomination Committee recommended to the Board that
Andrew Impey take over from me as Chairman of the Company following
my retirement at the AGM in 2019. It is pleasing that the Board has
been able to select the new Chairman from its existing membership
which will provide welcome continuity in the future.
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.
Sub-division of the Company's share capital
The Company has a relatively large share price which can present
difficulties for those who wish to make small or regular
investments and in relation to dividend reinvestment. In order to
address these difficulties and potentially increase market
liquidity, the Board is proposing a sub-division of the Company's
share capital on a five for one basis. I would like to reassure
existing shareholders that this sub-division of shares will not
affect the overall value of their holdings in the Company as each
Shareholder will hold the same proportionate interest in the
Company following the completion of the share split as before.
Under the share split proposal, each existing share will be
sub-divided into five new shares, each of which should be valued at
one-fifth of the price before the share split. The share split
proposal requires the approval of Shareholders at the forthcoming
AGM, and the Board recommends that Shareholders vote in favour of
this resolution.
Proposed Change to Benchmark and Amendments to Investment
Objective and Policy
Following the change in investment guidelines in 2016, which
increased the ability of the Company to invest up to 50% in AIM
listed companies, the Board, in conjunction with the Manager, has
conducted a review of the Company's benchmark. The existing
benchmark, the FTSE Small Cap Index (excluding investment trusts),
has changed its composition considerably over the past few decades,
with the number of constituents more than halving partly due to an
increasing number of companies opting to list on the AIM
market.
We therefore propose that the Company adopts the Numis Smaller
Companies plus AIM (excluding Investment Companies) Index as its
benchmark, which is more suitably aligned with the Company's
Investment Objectives. In conjunction with this change, the Board
also proposes to delete the market capitalisation limit from the
Investment Policy.
The Board is therefore seeking shareholder approval at the AGM
to amend the Company's Investment Objective and Policy to
incorporate these changes, which if approved will take effect from
the 1st January 2019. The Board recommends shareholders vote in
favour of this resolution.
Annual General Meeting
The Company's twent-eighth AGM will be held on Wednesday 28th
November 2018 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
Shareholders have made considerable gains over the last two
years despite significant domestic and international political and
economic concerns. This demonstrates that strongly placed and well
managed smaller companies are able to grow their businesses and
create value even under difficult circumstances. It also shows the
importance of a robust investment process and strong execution. I
am sure that Shareholders would wish to join the Board in
congratulating Georgina and Katen for delivering this
outperformance.
After a period of strong absolute performance, it would not be
surprising if the future was a little more difficult. It is
certainly the case that there are many significant challenges
ahead, some the result of political problems, but others the
symptoms of a long period of economic and stock market
performance.
Every period has its challenges, and experience shows that
whilst short-term performance is difficult to predict, well managed
smaller company investment can deliver good long-term returns for
patient investors.
Michael Quicke OBE
Chairman 15th October 2018
INVESTMENT MANAGERS' REPORT
Performance and Market Background
The strength of global growth was the focus for investors in
2017, but in 2018 an increase in geopolitical concerns, the threat
of a US trade war with China and the imminent departure of the UK
from the EU have dominated investor sentiment. In the UK, the
economic backdrop to the year saw the first interest rate rise in a
decade in November 2017, followed by a second rise this August post
our year end. On the positive side, unemployment is at a multi-year
low of 4%, and wage growth which has recently been above inflation
has led to nascent growth in disposable income for consumers.
The FTSE Small Cap (ex Investment Trusts) Index had a pedestrian
year. It underperformed both the FTSE 100 and the FTSE 250 indices,
and returned only 2.1% over the twelve months to the end of July
2018. Against this, we are delighted to report that the Company
enjoyed a very strong year and produced a total return on net
assets of 19.7%. The discount also narrowed, which meant that the
share price return was an impressive 31.8%.
Portfolio
The outperformance of the Company over the last financial year
was primarily achieved through stock selection. No fewer than five
of our largest positions produced incredibly strong returns, and
four of these remain in the portfolio, namely Plus500, Games
Workshop, Victoria and Fevertree. The fifth, Fenner, was the
subject of a bid at a significant premium and is now part of the
French company, Michelin. Fenner aside, there were many less
take-overs during the year than we have come to expect in recent
years. Indeed the last year saw more take-overs of large FTSE 250
companies (and one in the FTSE 100, GKN). Conversely, the smaller
companies arena saw a significant number of IPOs, or new companies
coming to the market. While we remain highly selective in our
approach to IPOs, we have participated in a significant number of
exciting new investment opportunities this year. Included among
them are a trio of companies in the gaming space, Sumo, Codemasters
and Team 17, Alpha Financial Markets Consulting, an asset
management consultancy, and two B2B platform providers for IFAs,
Integrafin and Nucleus Financial.
Other new additions to the portfolio include FairFX, an
international payments provider, and Future, a niche media business
which owns magazine and on-line assets. On the other side, we have
sold a number of holdings where our view on trading prospects has
been revised. These include Eddie Stobart, Character Group,
Amerisur and Renold. Sector positioning remains largely unchanged
over the year. We have significant overweights in both Industrials
and Consumer Goods, but remain very underweight in Consumer
Services and Financials, in particular exposure to UK real estate.
This positioning reflects our Brexit strategy for the portfolio,
which we put in place two years ago and which we continue to
believe will leave us well-positioned post the exit from the
EU.
Outlook
For UK investors, the dominant issue for this financial year is
Brexit. It is (almost) without doubt that the UK will leave the EU
within the year, but despite the deadline set by Article 50 being
only six months away, we still do not know what that exit will look
like. The Bank of England assumes that economic sanity will prevail
and therefore that the most likely outcome will be a gradual
transition to new trading arrangements within the EU. The Prime
Minister's recent Chequers speech on Brexit signalled a very soft
exit. However, in our view the increased political uncertainty post
that speech, the heightened divisions within the political parties,
and the currently stalled negotiations mean that the tail risk of
the UK exiting without any deal at all has risen materially.
This leads to a huge lack of clarity for companies, consumers
and investors. Add to this the looming threat of global trade wars
and it would be easy to become very pessimistic on the short term
outlook. However, despite this, the IMF is forecasting UK GDP
growth of 1.4% in 2018 and 1.5% in 2019. In the UK the
all-important PMI data (purchasing managers' indices) are still
indicating expansion, and lowered inflation expectations are
positive for the consumer. While business confidence metrics have
slipped, business investment remains low but positive, currently
growing at 2-3%.
Despite this backdrop, we strongly believe it is wrong to be too
pessimistic. The message from our companies, and the underlying
macro-economic data, remain positive. Our experience during the
depths of the global financial crisis a decade ago has taught us of
the resilience of the UK's smaller companies. Current forecasts are
for earnings growth of over 13% for the FTSE Small Cap Index over
the next year, versus sub 8% for the FTSE All Share. Operating as a
large number of our investments do in niche structural growth
markets, they tend to be much less linked to the overall
performance of the UK economy, and can grow significantly faster.
We believe that the Company has invested in a portfolio of such
companies, and we intend to utilise any market volatility over the
next several months to add to a number of our key positions.
Georgina Brittain
Katen Patel
Investment Managers 15th October 2018
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:
-- Corporate Strategy
The corporate strategy, including the investment objectives and
policies, may not be of sufficient interest to current or
prospective shareholders. Other factors, such as the size of the
Company and level of liquidity in its shares, may also deter
shareholder interest, resulting in the shares trading at an
increased discount to net asset value. The Board regularly reviews
its strategy, and assesses, with its brokers, shareholder
views.
-- Investment and Performance
Poor investment performance, for example due to poor stock
selection, asset allocation or an inappropriate 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 and liquidity reports. 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 a lack of liquidity in the 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.
-- Investment Management Team
Investment performance may suffer if the designated investment
managers were to leave. The Board considers that, though there may
be short-term disruption, the risk would be mitigated by the
substantial investment management resources of JPMorgan, and the
use of an established investment methodology.
-- 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.
-- 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 in
the Annual Report. The Board receives regular reports from the
Manager and the Company's broker about shareholder communications,
their views and their activity.
-- 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 Bank of
New York Mellon (International) 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 in 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 in the Annual Report and
Financial Statements.
TRANSACTIONS WITH THE MANAGER AND RELATED PARTIES
Details of the management contract are set out in the Directors'
Report section in the 2018 Annual Report. The management fee
payable to the Manager for the year was GBP1,861,000 (2017:
GBP1,580,000) of which GBPnil (2017: GBPnil) was outstanding at the
year end.
During the year GBP3,000 was refunded by (2017: GBP54,000
including VAT, was paid to) the Manager for the administration of
savings scheme products, of which GBP6,000 (2017: GBP16,000) was
outstanding at the year end.
Included in administration expenses in note 6 in the 2018 Annual
Report and Financial Statements are safe custody fees amounting to
GBP4,000 (2017: GBP3,000) payable to JPMorgan Chase of which
GBP1,000 (2017: GBP1,000) was outstanding at the year end.
The Manager may carry out some of its dealing transactions
through group subsidiaries. These transactions are carried out at
arm's length. The commission payable to JPMorgan Securities Limited
for the year was GBP1,000 (2017: GBP3,000) of which GBPnil (2017:
GBPnil) was outstanding at the year end.
The Company also holds cash in the JPMorgan Sterling Liquidity
Fund, which is managed by JPMorgan. At the year end this was valued
at GBP3.6 million (2017: GBP8.3 million). Interest amounting to
GBP25,000 (2017: GBP16,000) was receivable during the year of which
GBPnil (2017: GBPnil) was outstanding at the year end.
Handling charges on dealing transactions amounting to GBP10,000
(2017: GBP14,000) were payable to JPMorgan Chase during the year of
which GBP3,000 (2017: GBP3,000) was outstanding at the year
end.
At the year end, total cash of GBP250,000 (2017: GBP370,000) was
held with JPMorgan Chase. A net amount of interest of GBP49 (2017:
GBP167) was receivable by the Company during the year from JPMorgan
Chase of which GBP6 (2017: GBP85) was outstanding at the year
end.
Full details of Directors' remuneration and shareholdings can be
found in the 2018 Annual Report and Financial Statements.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors are responsible for preparing the Annual Report
and 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), comprising FRS 102 'The Financial
Reporting Standard applicable in the UK and Republic of Ireland'
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 preparing these financial statements,
the Directors are required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgments and accounting 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 a 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 adequate 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 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 Strategic Report, a Directors' Report
and a Directors' Remuneration Report that comply with that law. The
Strategic Report and the Directors' report include a fair review of
the development and performance of the business and the position of
the issuer, together with a description of the principal risks and
uncertainties that they face.
Each of the Directors, whose names and functions are listed in
Directors' Report confirm that, to the best of their knowledge:
-- the Company's financial statements, which have been prepared
in accordance with United Kingdom Generally Accepted Accounting
Practice (United Kingdom Accounting Standards, comprising FRS 102
'The Financial Reporting Standard applicable in the UK and Republic
of Ireland', and applicable law), give a true and fair view of the
assets, liabilities, financial position and profit of the Company;
and
-- the Directors' 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 Directors consider that the annual report and accounts,
taken as a whole, is fair, balanced and understandable and provides
the information necessary for shareholders to assess the Company's
performance, business model and strategy.
For and on behalf of the Board
Michael Quicke OBE
Chairman 15th October 2018
FINANCIAL STATEMENTS
STATEMENT OF COMPREHENSIVE INCOME FOR THE YEARED 31ST JULY
2018
2018 2017
Revenue Capital Total Revenue Capital Total
(1)
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------- -------- -------- -------- -------- --------- ---------
Gains on investments held
at fair
value through profit
or loss - 32,282 32,282 - 44,934 44,934
Net foreign currency (losses)/gains - (17) (17) - 22 22
Income from investments 6,219 - 6,219 5,133 - 5,133
Interest receivable and
similar income 25 - 25 50 - 50
------------------------------------- -------- -------- -------- -------- --------- ---------
Gross return 6,244 32,265 38,509 5,183 44,956 50,139
Management fee (558) (1,303) (1,861) (474) (1,106) (1,580)
Other administrative expenses (354) - (354) (452) - (452)
------------------------------------- -------- -------- -------- -------- --------- ---------
Net return on ordinary
activities
before finance costs
and taxation 5,332 30,962 36,294 4,257 43,850 48,107
Finance costs (94) (220) (314) (66) (154) (220)
------------------------------------- -------- -------- -------- -------- --------- ---------
Net return on ordinary
activities
before taxation 5,238 30,742 35,980 4,191 43,696 47,887
Taxation (233) - (233) (141) - (141)
------------------------------------- -------- -------- -------- -------- --------- ---------
Net return on ordinary
activities
after taxation 5,005 30,742 35,747 4,050 43,696 47,746
------------------------------------- -------- -------- -------- -------- --------- ---------
Return per share (note
2) 30.69p 188.53p 219.22p 24.24p 261.48p 285.72p
(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 CHANGES IN EQUITY FOR THE YEARED 31ST JULY 2018
Called Capital
up
share Share redemption Capital Revenue
capital premium reserve reserves reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------ -------- -------- ----------- --------- --------- ---------
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
(note 3) - - - - (3,055) (3,055)
------------------------------ -------- -------- ----------- --------- --------- ---------
At 31st July 2017 4,275 25,895 2,609 168,812 5,694 207,285
Repurchase and cancellation
of the
Company's own shares (290) - 290 (12,007) - (12,007)
Net return on ordinary
activities - - - 30,742 5,005 35,747
Dividends paid in the year
(note 3) - - - - (3,917) (3,917)
------------------------------ -------- -------- ----------- --------- --------- ---------
At 31st July 2018 3,985 25,895 2,899 187,547 6,782 227,108
------------------------------ -------- -------- ----------- --------- --------- ---------
STATEMENT OF FINANCIAL POSITION AT 31ST JULY 2018
2018 2017
GBP'000 GBP'000
-------------------------------------------------- --------- ----------
Fixed assets
Investments held at fair value through profit or
loss 247,785 224,092
Current assets
Debtors 1,941 738
Cash and cash equivalents 3,817 8,649
-------------------------------------------------- --------- ----------
5,758 9,387
Current liabilities
Creditors: amounts falling due within one year (26,435) (26,194)
-------------------------------------------------- --------- ----------
Net current liabilities (20,677) (16,807)
-------------------------------------------------- --------- ----------
Total assets less current liabilities 227,108 207,285
-------------------------------------------------- --------- ----------
Net assets 227,108 207,285
-------------------------------------------------- --------- ----------
Capital and reserves
Called up share capital 3,985 4,275
Share premium 25,895 25,895
Capital redemption reserve 2,899 2,609
Capital reserves 187,547 168,812
Revenue reserve 6,782 5,694
-------------------------------------------------- --------- ----------
Total shareholders' funds 227,108 207,285
-------------------------------------------------- --------- ----------
Net asset value per Ordinary share (note 4) 1,424.9p 1,212.2p
-------------------------------------------------- --------- ----------
STATEMENT OF CASH FLOWS FOR THE YEARED 31ST JULY 2018
2018 2017
GBP'000 GBP'000
------------------------------------------------------ --------- ---------
Net cash outflow from operations before dividends
and interest (2,309) (1,956)
Dividends received 5,907 4,696
Interest received 96 21
Interest paid (305) (220)
Taxation recovered - 2
------------------------------------------------------ --------- ---------
Net cash inflow from operating activities 3,389 2,543
------------------------------------------------------ --------- ---------
Purchases of investments (80,826) (77,062)
Sales of investments 85,868 70,724
Settlement of foreign currency contracts (12) (2)
------------------------------------------------------ --------- ---------
Net cash inflow/(outflow) from investing activities 5,030 (6,340)
------------------------------------------------------ --------- ---------
Dividends paid (3,917) (3,055)
Repurchase and cancellation of the Company's own
shares (12,334) (5,941)
Issue of Ordinary shares on exercise of Subscription
shares - 7,867
Drawdown of loans 3,000 3,000
------------------------------------------------------ --------- ---------
Net cash (outflow)/inflow from financing activities (13,251) 1,871
------------------------------------------------------ --------- ---------
Decrease in cash and cash equivalents (4,832) (1,926)
------------------------------------------------------ --------- ---------
Cash and cash equivalents at start of year 8,649 10,575
Cash and cash equivalents at end of year 3,817 8,649
------------------------------------------------------ --------- ---------
Decrease in cash and cash equivalents (4,832) (1,926)
------------------------------------------------------ --------- ---------
Cash and cash equivalents consist of:
Cash and short-term deposits 250 370
Cash held in JPMorgan Sterling Liquidity Fund 3,567 8,279
------------------------------------------------------ --------- ---------
Total 3,817 8,649
------------------------------------------------------ --------- ---------
NOTES TO THE FINANCIAL STATEMENTS
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 '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
February 2018.
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 in the Audit Committee
Report 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. Return per share
2018 2017
GBP'000 GBP'000
--------------------------------------------------- ----------- -----------
Revenue return 5,005 4,050
Capital return 30,742 43,696
--------------------------------------------------- ----------- -----------
Total return 35,747 47,746
--------------------------------------------------- ----------- -----------
Weighted average number of shares in issue during
the year 16,306,641 16,710,754
Revenue return per share 30.69p 24.24p
Capital return per share 188.53p 261.48p
--------------------------------------------------- ----------- -----------
Total return per share 219.22p 285.72p
--------------------------------------------------- ----------- -----------
3. Dividends
(a) Dividends paid and proposed
2018 2017
GBP'000 GBP'000
----------------------------------------------------- -------- --------
Dividend paid
2017 final dividend of 23.0p (2016: 18.3p) per
share 3,917 3,055
----------------------------------------------------- -------- --------
Dividend proposed
2018 final dividend proposed of 27.0p (2017: 23.0p)
per share 4,303 3,933
----------------------------------------------------- -------- --------
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
2017 amounted to GBP3,933,000. However the amount paid amounted to
GBP3,917,000 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
2018 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 2019.
(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 GBP5,005,000 (2017: GBP4,050,000). The revenue reserve
after payment of the final dividend will amount to GBP2,479,000
(2017: GBP1,761,000).
2018 2017
GBP'000 GBP'000
------------------------------------------------------ -------- --------
2018 final dividend of 27.0p (2017: 23.0p) per share 4,303 3,933
------------------------------------------------------ -------- --------
4. Net asset value per share
2018 2017
------------------------------------ ----------- -----------
Net assets (GBP'000) 227,108 207,285
Number of shares in issue 15,938,601 17,099,806
------------------------------------ ----------- -----------
Net asset value per Ordinary share 1,424.9p 1,212.2p
------------------------------------ ----------- -----------
5. Status of results announcement
2017 Financial Information
The figures and financial information for 2017 are extracted
from the Annual Report and Financial Statements for the year ended
31st July 2017 and do not constitute the statutory accounts for the
year. The Annual Report and Financial Statements 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. The Annual Report and Financial
Statements will be delivered to the Register of Companies in due
course.
2018 Financial Information
The figures and financial information for 2018 are extracted
from the published Annual Report and Financial Statements for the
year ended 31st July 2018 and do not constitute the statutory
accounts for that year. The Annual Report and Financial Statements
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.
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.
15th October 2018
For further information, please contact:
Lucy Dina
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.
JPMORGAN FUNDS LIMITED
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
FR FFMFDIFASEES
(END) Dow Jones Newswires
October 15, 2018 09:31 ET (13:31 GMT)
Jpmorgan Uk Smaller Comp... (LSE:JMI)
Historical Stock Chart
From Apr 2024 to May 2024
Jpmorgan Uk Smaller Comp... (LSE:JMI)
Historical Stock Chart
From May 2023 to May 2024