JPMorgan Asia G&I - Half-year Report
30/05/2024 07:00
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RNS Number : 3558Q JPMorgan Asia Growth & Income PLC 30 May 2024
LONDON STOCK EXCHANGE ANNOUNCEMENT
JPMORGAN ASIA GROWTH AND INCOME PLC
UNAUDITED HALF YEAR RESULTS FOR THE SIX MONTHS ENDED 31ST MARCH 2024
Legal Entity Identifier: 5493006R74BNJSJKCB17
Information disclosed in accordance with DTR 4.2.2
CHAIRMAN'S STATEMENT
Performance and Market Background
The Company's return on net assets over the six months ended 31st March 2024
was 4.6%, while the return to Ordinary shareholders was 3.4%, reflecting a
widening of the trust's share price discount to net asset value ('NAV') over
the period. The Company underperformed its benchmark, the MSCI AC Asia ex
Japan Index, which returned 5.3%, due mostly to its underweight to the
thriving Indian market, which rose strongly over the period, and to the poor
performance of a number of Chinese stocks. While this underperformance is
disappointing, the Company invests for the long-term, so it is more meaningful
to consider performance over longer timeframes. The Company has outperformed
its benchmark over the long term period of five and ten years ended 31st March
2024.
The Portfolio Managers' Report which follows includes a market review and
details of performance and portfolio positioning, together with an assessment
of the outlook for Asian equity markets.
Dividend Policy
In the absence of unforeseen developments, the Company's dividend policy aims
to pay regular, quarterly dividends, each equivalent to 1% of the Company's
NAV, based on the NAV on the last business day of each financial quarter,
being the end of December, March, June and September. Dividends are funded
from a combination of revenue and capital reserves. Shareholders are reminded
that dividends are based on a percentage of net assets, so the dividend paid
to shareholders will reflect the Company's net assets at each quarter end.
Dividends will therefore be subject to market and performance fluctuations and
will vary from quarter to quarter, in line with underlying earnings, currency
movements and changes in the portfolio.
In the Board's view, resetting the dividend quantum each quarter is a prudent
way of delivering an income which tracks performance and does not put the
Company under strain. For the year ended 30th September 2023, dividends paid
totalled 15.7 pence per share (2022: 16.5 pence per share). In respect of the
following two quarters ended 31st December 2023 and 31st March 2024, the
Company paid quarterly dividends of 3.7 pence and 3.9 pence respectively. Two
further dividends will be declared on the first business day after 30th June
and 30th September 2024.
Premium/Discount and Share Capital Management
The discount at which the Company's shares trade widened during the review
period, ending at 10.4%. This is slightly higher than the discount of 9.2% at
the end of the last financial year, but remains broadly in line with the
discounts of its immediate peers. The Board's view is that buy back activity
can help balance the demand for and supply of the Company's shares, while
maintaining underlying liquidity. The Company utilised its buy back powers
over the period, buying in a total of 5.6 million shares (representing 6.2%
of issued share capital) and holding them in Treasury. The maximum number of
Ordinary shares authorised to be purchased as per the shareholder's approval
at the Annual General Meeting is 13,381,538, or if less, that number of
Ordinary shares which is equal to 14.99% of the issued share capital
(excluding shares held in Treasury) as at 15th February 2024.
Gearing
Over the reporting period and at the time of writing, the Company was not
geared. The Company's multi-currency loan facility with Scotiabank was retired
in December 2023. However, the Board regularly discusses gearing with the
Portfolio Managers and is considering approaching potential funders to
reinstate a loan facility. This will give the Portfolio Managers the capacity
to utilise market drawdowns to gear the portfolio, with a view to enhancing
performance during subsequent market upturns.
Environmental, Social and Governance issues
It is the Board's strong conviction that effective investment stewardship can
materially contribute to the construction of stronger portfolios over the long
term, and therefore enhance returns. The Company's Investment Manager has a
well-established approach to investment stewardship, designed both to
understand how companies address issues related to Environmental, Social and
Governance ('ESG') factors and to seek to influence their behaviour and
encourage best practice. Financially material ESG factors have been integrated
into the investment process, and these issues are considered as part of the
investment decision making process. The Board receives regular ESG updates
from the Investment Manager.
The Investment Manager has recently published a document containing its latest
Investment Stewardship Priorities, which may be of interest to shareholders.
This can be found at:
https://am.jpmorgan.com/gb/en/asset-management/adv/about-us/investment-stewardship/
Board Succession
The Board plans for succession to ensure it retains an appropriate balance of
skills, knowledge and diverse perspectives. Following Dean Buckley's
retirement at the February 2024 Annual General Meeting, June Aitken has become
the Chair of the Audit Committee, and Peter Moon the Senior Independent
Director. On behalf of the Board I would like to thank Dean Buckley once again
for his significant contribution to the Company during his ten years of
service. The Board can confirm that its current composition is compliant with
all applicable diversity targets for UK companies listed on the premium
segment of the London Stock Exchange. It is the Board's intention that this
will continue to be the case.
Stay Informed
The Company is committed to engaging with its shareholders, in particular
those with smaller holdings who invest via platforms. To support this goal,
the Company delivers email updates on the Company's progress with regular news
and views, as well as the latest performance data. If you have not already
signed up to receive these communications and you wish to do so, you can opt
in via https://tinyurl.com/JAGI-Sign-Upor by scanning the QR code on page 10
of the Company's Half Year Report for the six months ended 31st March 2024
('2024 Half Year Report').
Outlook
The Asian equity markets remain extremely attractive in absolute terms and
relative to other markets, there are reasons to be optimistic about the
outlook as the global backdrop is supportive. Inflation is gradually receding
in the US and other developed markets, the US economy is doing better than
expected and appears to have avoided a hard landing, and the US Federal and
other central banks seem likely to cut interest rates later this year. This
may not happen as quickly as many had previously anticipated, but the prospect
of lower rates has nonetheless provided comfort to investors and ensured major
western markets have started the year on a positive note.
However, the geopolitical outlook remains uncertain, clouded by the ongoing
war in Ukraine and violence in the Middle East. The US Presidential election
and its potential consequences for US relations with Russia and China could
provide further challenges at the end of the year and beyond.
In Asia, China's equity market started the year well and more recently Beijing
has started to take more decisive action to resolve its property crisis, while
valuations in India look expensive, other markets remain attractive. Recent
efforts by the South Korean authorities to emulate Japan's successful
corporate governance reforms suggest that shareholder returns in the Korean
market are set to begin improving, just as they are doing in Japan.
There may be periods, such as the past six months, when the Company
underperforms the Benchmark and you will note that the Portfolio Managers'
address this directly in their report. However the long-term performance track
record of outright gains and outperformance attests to the strategy's
effectiveness in maximising total returns over the long run. The Board remains
confident that this approach, allied with the Portfolio Managers' experience
and expertise, will continue to reward investors going forward.
We share the Portfolio Managers' view that over the longer term, the Asian
region can look forward to many years of strong growth and productivity
increases, thanks to structural changes including digitalisation, urbanisation
and the expansion of the middle class. These trends will continue to generate
compelling investment opportunities and we are confident that the focused and
disciplined stock selection process adopted by the Investment Manager will
identify and grasp these opportunities as they emerge, ensuring the Company
continues to deliver growth and income to shareholders over the long term.
On behalf of the Board, I would like to thank you for your continuing support.
Sir Richard Stagg
Chairman
29th May 2024
PORTFOLIO MANAGERS' REPORT
Performance
During the six months ended 31st March 2024, Asian stock markets delivered
positive returns. The Company's benchmark, the MSCI AC Asia ex Japan Index,
rose 5.3% (in GBP terms) during the period, while your Company made a total
return on net assets of 4.6%. The underweight in India, combined with
positions in Chinese and Hong Kong stocks, were the largest detractors.
However, despite this recent underperformance, the Company has a positive
long-term track record of absolute returns and outperformance. Over the ten
years to 31st March 2024, the Company generated an average annualised return
of 9.2% in NAV terms, compared with the benchmark return of 7.1%.
In this report, we will discuss the major market developments during the
review period, recent contributors to performance, current portfolio
structure, and the outlook for the remainder of 2024.
The Market Environment
Investor sentiment varied across the region in the first half of the Company's
financial year. There was a wide gap in the performance: Taiwanese equities
were the best performers, rising by nearly 30%, followed by Korea and India,
both of which made returns of around 15%; by contrast, the Chinese and Hong
Kong markets both fell by nearly 10%.
Taiwan's strong performance was driven primarily by stocks associated with
high-performance computing and artificial intelligence (AI). Taiwan's
semiconductor supply chain possesses some of the world's top players in the
industry, most notably Taiwan Semiconductor Manufacturing Company (TSMC),
which has a near monopoly in the global production of the smallest,
leading-edge chips. Taiwan's dominant position in the sector is further
assured by a complex supply chain of semiconductor design, components and
server assembly businesses that are all benefitting from increased spending on
generative AI models. These trends have also extended to Korea, which is home
to several manufacturers of high band-width memory chips. These are used
alongside graphic processing units in the high-performance, large language
computing models that drive generative AI software. The broader Korean market
re-rated sharply in the first quarter of 2024 in response to the government's
initiative to improve corporate governance. As has been the case in Japan,
this initiative is expected to see companies in the financial sector,
including banks and brokerages, step up shareholder returns. Meanwhile, the
Indian market continues to do well, thanks to robust economic growth and a
re-rating of stock market valuations, especially amongst firms seen as
beneficiaries of the rise in capital spending.
Indonesian equities were up just over 1% during the period mainly in response
to positive political developments. The country conducted general elections to
elect a new President, Legislature and representatives of regional and local
bodies. The outgoing President Joko Widodo is highly regarded for initiating
sustainable reforms during his tenure. Joko Widodo was replaced by Prabowo
Subianto as president, in a generally smooth election process. Prabowo
Subianto is expected to pursue similar policies to his predecessor.
In China, 2023 marked the third successive year of market declines for the
MSCI China Index. The ongoing poor performance of the Chinese and Hong Kong
markets during the review period was fuelled by continued property sector
weakness, which is weighing on investor and consumer sentiment and adversely
impacting equity market valuations. The property market's protracted woes are
now also translating into below-trend corporate earnings growth.
Performance Attribution
For the six months ended 31st March 2024
% %
Contributions to total returns
Benchmark return (in sterling terms) 5.3
Stock selection -0.8
Currency effect 0.0
Gearing/Cash 0.0
Investment Manager contribution -0.8
Dividend/residual(1) -0.1
Portfolio return 4.4
Management fee/other expenses -0.4
Share buy-back 0.6
Return on net assets 4.6
Return to shareholders(A) 3.4
(1) The dividend/residual arises principally from timing differences
in the treatment of income flows.
(A) Alternative Performance Measure ('APM').
Source: FactSet, JPMAM and Morningstar.
All figures are on a total return basis. Performance attribution analyses how
the portfolio achieved its recorded performance relative to its benchmark.
A glossary of terms and APMs is provided on pages 31 to 33 of the Half Year
Report.
Major Contributors and Detractors to Performance
Contributors
The main contributors to performance over the six months to end March 2024
included SK Hynix, which is a leading Korean manufacturer of memory chips.
This stock's good performance over the period was underpinned by rising
shipments of advanced memory chips for use in high performance computing,
including AI software and large language modelling. Foxconn Industrial was
another key contributor. This company is a leading Chinese designer and
manufacturer of communication network and cloud service equipment, precision
tools, and industrial robots. Its good share price performance was fuelled by
rising orders for AI server assembly. TSMC maintained its technological and
economic leadership in the semiconductor sector, outpacing large competitors
such as Samsung Electronics and Intel. Our decision not to hold Alibaba, a
major Chinese internet retailer, also enhanced returns as rising competition
in the Chinese e-commerce sector has resulted in lower growth and poor share
price performance for large players such as Alibaba.
Detractors
Yum China, an operator of restaurant chains, was one of the main detractors
from performance over the review period. The shares underperformed as
down-trading and competition put pressure on margins and sales. Hong Kong
Exchange was hurt by the decline in the market and lower stock market trading
volumes. India's HDFC Bank was adversely impacted by its merger with its
parent HDFC Ltd. This transaction coincided with some tightening in liquidity
that resulted in elevated costs and negligible earnings growth.
Portfolio Activity and Positioning
Buys
Efforts by Korean policy makers to improve corporate governance and increase
shareholder returns prompted us to purchase several over-capitalised Korean
banks that are likely to begin returning cash to shareholders via increased
dividends or share buybacks. We also opened a position in Taiwan's ASE
Technology, a leader in semiconductor packaging assembly and testing, which is
benefiting from the increasing complexity of chip packaging.
Sells
We sold our position in Xinyi Solar, a Chinese solar glass producer. Three
factors have conspired to worsen the company's prospects: an oversupply of
panel capacity; increased competition from loss-making Chinese companies; and
weak European demand. We also exited Chinese internet retailer Meituan. The
company's in-store business has seen increasing competition from Chinese
private companies which has weighed on overall returns, despite a broad
improvement in Meituan's core food delivery business.
Outlook
This year began with much discussion about falling US inflation, and the
prospect that this would allow the US Fed to ease policy, thereby increasing
the likelihood of a soft landing, rather than the recession many feared.
However, economic data released during the first three months of 2024 proved
more resilient than expected. Corporate cash flows have been healthy,
companies have insulated themselves from the worst effects of high interest
rates, and real rates are lower than in previous cycles. As a result, the
economic and corporate environment has been sufficiently robust to withstand
the impact of higher nominal rates. Investors revised their forecasts for
inflation and near-term rate cuts accordingly. Additionally, as Jamie Dimon
(Chairman & CEO of JPMorgan Chase Bank) noted in his annual letter to
shareholders, there is a growing need for spending to support the transition
to a net zero economy, the restructuring of global supply chains and rising
healthcare costs. All these factors could compound the stickiness of
inflation. The trajectory of yields on ten-year US Treasuries has mapped the
path of inflation expectations over recent months. Yields fell from 5% in
October 2023, to a low of 3.8% in January of 2024, before rising to 4.5% at
the time of writing.
In Asia, market attention has focused on the poor performance of Chinese
equities, especially relative to developed markets. Chinese equities declined
by 17% in the five years to the end of 2023, while US and European large cap
stocks have risen by 107% and 60% respectively over this period. The major
problem facing China is the enormous misallocation of capital into the
residential property sector. Home ownership stands at 90%, and 20% of
households own more than one home. However, the sector is now struggling with
massive oversupply and declining sales, and several developers have been
bankrupted by heavy debt burdens. The challenging outlook for residential
property exacerbated by demographic trends has weighed on Chinese consumer
sentiment, which is at an all-time low. On the positive side, poor equity
market sentiment has resulted in attractive valuations. With lower Chinese
interest rates likely to stimulate economic activity, there is considerable
scope for a recovery in valuations, if stronger growth lifts corporate
earnings.
In sharp contrast to the current malaise in the Chinese market, the backdrop
for markets in India and Taiwan appears extremely positive. In these markets,
high valuations are the stumbling block for many investors, especially in
India, where the index is trading close to all-time high valuations, as
measured on a price to book basis. As noted above, this market is being buoyed
by India's strong economic performance. Following a contraction in 2021,
India's GDP growth exceeded 9% in 2022 and 7% in 2023 in real terms, and is
expected to have reached a similar level for the fiscal year ending March
2024, thanks to rising urban consumption, supported by wage growth, and a
surge in capital expenditure. It is widely expected that Prime Minister Modi
will win the current parliamentary elections.
The Taiwanese market has been led by the growing earnings of its largest
company, TSMC, and broad swathes of the technology sector that are seen as
beneficiaries of rising tech spending, especially in AI-related areas. With
respect to TMSC, recent company meetings and industry analysis suggest that
the company has consolidated its global leadership in the fabrication of the
most advanced semiconductor chips. Within its high performance computing
business, it is possible that revenues related to AI processing chips could
rise to 20% of total revenues within the next three years, compared to below
10% today.
We are excited by the Korean authorities' efforts to replicate Japan's
successful corporate governance reform agenda. Korea's so-called 'Corporate
Value-Up Program' encourages companies to take steps to improve their chronic
low valuations, due to the risk of being 'named and shamed' if they fail to
act. In addition, the authorities plan to make supportive regulatory changes
aimed at protecting minority shareholders from poor governance practices.
While questions remain regarding the authorities' commitment to corporate
governance reforms, the measures have the support of some 14 million
individual investors, who together account for one third of eligible voters.
This reform program is part of broader efforts by Korean regulators and
various capital market leaders to help households create wealth through
investment in financial assets. The plan also incorporates proposals for tax
incentives, including the removal of capital gains tax, which will take effect
from 2025.
Despite persistent uncertainties related to global and regional geo-political
tensions, Asia's powerful combination of strong growth, innovation, favourable
structural trends, and attractive valuations in at least in some key markets,
underpins our belief that Asian equity markets continue to provide many
attractive investment opportunities. We remain confident that our long
experience, our presence on the ground in local markets, and our focus on the
fundamental analysis of specific stocks, will allow us to keep identifying the
region's best opportunities, ensuring the Company continues to provide our
shareholders with attractive returns, outperformance and a predictable
dividend over the long-term.
For and on behalf of the Investment Manager
Ayaz Ebrahim
Robert Lloyd
Portfolio Managers
29th May 2024
INTERIM MANAGEMENT REPORT
The Company is required to make the following disclosures in its half year
report:
Principal Risks and Uncertainties
The principal and emerging risks faced by the Company fall into the following
broad categories: investment and strategy, geopolitical and economic,
operational risk and cybercrime, climate change and global pandemic.
Information on the principal and emerging risks faced by the Company is given
in the business review section within the Annual Report and Financial
Statements for the year ended 30th September 2023.
Related Parties Transactions
During the first six months of the current financial year, no transactions
with related parties have taken place which have materially affected the
financial position or the performance of the Company during the period.
Going Concern
The Directors believe, having considered the Company's investment objectives,
risk management policies, capital management policies and procedures, nature
of the portfolio (being mainly securities which are readily realisable) and
expenditure projections, that the Company has adequate resources, an
appropriate financial structure and suitable management arrangements in place
to continue in operational existence for the foreseeable future and, more
specifically, that there are no material uncertainties pertaining to the
Company that would prevent its ability to continue in such operational
existence for at least 12 months from the date of the approval of this
half-yearly financial report. For these reasons, they consider there is
reasonable evidence to adopt the going concern basis in preparing the
financial statements. This conclusion also takes into account the Board's
assessment of the impact of heightened market volatility due to the Russian
invasion of Ukraine and the unrest in Israel and Gaza.
Continuation votes are held every three years and the next continuation vote
will be put to shareholders at the Annual General Meeting in 2026.
Directors' Responsibilities
The Board of Directors confirms that, to the best of its knowledge:
(i) the condensed set of financial statements contained within the
half yearly financial report has been prepared in accordance with FRS 104
'Interim Financial Reporting' and gives a true and fair view of the state of
affairs of the Company and of the assets, liabilities, financial position and
net return of the Company, as at 31st March 2024, as required by the UK
Listing Authority Disclosure Guidance and Transparency Rules 4.2.4R; and
(ii) the interim management report includes a fair review of the
information required by 4.2.7R and 4.2.8R of the UK Listing Authority
Disclosure Guidance and Transparency Rules.
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 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 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.
For and on behalf of the Board
Sir Richard Stagg
Chairman
29th May 2024
CONDENSED STATEMENT OF COMPREHENSIVE INCOME
(Unaudited) (Unaudited) (Audited)
Six months ended Six months ended Year ended
31st March 2024 31st March 2023 30th September 2023
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Gains on investments held at
fair value through profit
or loss - 11,787 11,787 - 37,196 37,196 - 16,289 16,289
Net foreign currency
(losses)/gains - (233) (233) - (90) (90) - 114 114
Income from investments 2,465 - 2,465 3,289 - 3,289 8,304 - 8,304
Interest receivable and
similar income(1) 49 - 49 55 - 55 100 - 100
Gross return 2,514 11,554 14,068 3,344 37,106 40,450 8,404 16,403 24,807
Management fee (842) - (842) (1,003) - (1,003) (2,039) - (2,039)
Other administrative expenses (478) - (478) (467) - (467) (827) - (827)
Net return before finance
costs and taxation 1,194 11,554 12,748 1,874 37,106 38,980 5,538 16,403 21,941
Finance costs (29) - (29) (36) - (36) (52) - (52)
Net return before taxation 1,165 11,554 12,719 1,838 37,106 38,944 5,486 16,403 21,889
Taxation (charge)/credit (316) (481) (797) (396) 27 (369) (846) (219) (1,065)
Net return after taxation 849 11,073 11,922 1,442 37,133 38,575 4,640 16,184 20,824
Return per share (note 3) 0.96p 12.50p 13.46p 1.52p 39.08p 40.60p 4.94p 17.22p 22.16p
(1) Includes income from securities lending.
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) after taxation represents the profit/(loss) for the period
and also the total comprehensive income.
CONDENSED STATEMENT OF CHANGES IN EQUITY
Called up Exercised Capital
share Share warrant redemption Capital Revenue
capital premium reserve reserve reserves(1) reserve(1) Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Six months ended 31st March 2023 (Unaudited)
At 30th September 2023 24,449 46,705 977 25,121 247,577 - 344,829
Repurchase of shares into Treasury - - - - (18,926) - (18,926)
Proceeds from share forfeiture(2) - - - - 412 - 412
Net return - - - - 11,073 849 11,922
Dividends paid in the period (note 4) - - - - (5,661) (849) (6,510)
At 31st March 2024 24,449 46,705 977 25,121 234,475 - 331,727
Six months ended 31st March 2023 (Unaudited)
At 30th September 2022 24,449 46,705 977 25,121 261,308 - 358,560
Repurchase of shares into Treasury - - - - (8,343) - (8,343)
Net return - - - - 37,133 1,442 38,575
Dividends paid in the period (note 4) - - - - (5,916) (1,442) (7,358)
At 31st March 2023 24,449 46,705 977 25,121 284,182 - 381,434
Year ended 30th September 2023 (Audited)
At 30th September 2022 24,449 46,705 977 25,121 261,308 - 358,560
Repurchase of shares into Treasury - - - - (19,801) - (19,801)
Net return - - - - 16,184 4,640 20,824
Dividends paid in the year (note 4) - - - - (10,114) (4,640) (14,754)
At 30th September 2023 24,449 46,705 977 25,121 247,577 - 344,829
(1) These reserves form the distributable reserves of the Company and
may be used to fund distributions to investors.
(2) During the period the Company undertook an Asset Reunification
Program for its shareholders. As a result, and in accordance with the
Company's Articles of Association, shares that could not be traced to
shareholders were forfeited. These share were sold in the open market and the
proceeds returned to the Company.
CONDENSED STATEMENT OF FINANCIAL POSITION
(Unaudited) (Unaudited) (Audited)
At At At
31st March 2024 31st March 2023 30th September 2023
£'000 £'000 £'000
Fixed assets
Investments held at fair value through profit or loss 329,811 379,850 342,829
Current assets
Debtors 1,133 5,546 3,680
Cash and cash equivalents 2,072 8 207
3,205 5,554 3,887
Current liabilities
Creditors: amounts falling due within one year (563) (3,970) (1,641)
Net current assets 2,642 1,584 2,246
Total assets less current liabilities 332,453 381,434 345,075
Provision for capital gains tax (726) - (246)
Net assets 331,727 381,434 344,829
Capital and reserves
Called up share capital 24,449 24,449 24,449
Share premium 46,705 46,705 46,705
Exercised warrant reserve 977 977 977
Capital redemption reserve 25,121 25,121 25,121
Capital reserves 234,475 284,182 247,577
Total shareholders' funds 331,727 381,434 344,829
Net asset value per share (note 5) 388.4p 404.6p 378.8p
CONDENSED STATEMENT OF CASH FLOWS
(Unaudited) (Unaudited) (Audited)
Six months ended Six months ended Year ended
31st March 2024 31st March 2023 30th September 2023
£'000 £'000 £'000
Cash flows from operating activities
Net return before finance costs and taxation 12,748 38,980 21,941
Adjustment for:
Net gains on investments held at fair value through profit or loss (11,787) (37,196) (16,289)
Net foreign currency losses/(gains) 233 90 (114)
Dividend income (2,465) (3,289) (8,289)
Interest income (42) (15) (54)
Scrip dividends received as income - - (15)
Realised (gains)/losses on foreign exchange transactions (173) (122) 232
Realised exchange (losses)/gains on the JPM USD Liquidity Fund (69) (31) 125
Increase in accrued income and other debtors (5) (14) (7)
(Decrease)/increase in accrued expenses (109) (25) 68
Net cash used in operating activities (1,669) (1,622) (2,402)
Dividends received 1,738 1,647 7,444
Interest received 42 15 54
Overseas withholding tax recovered/(suffered) 22 (18) -
Capital gains tax recovered - 27 27
Net cash inflow from operating activities 133 49 5,123
Purchases of investments (98,751) (84,176) (178,025)
Sales of investments 126,366 97,228 206,375
Net cash inflow from investing activities 27,615 13,052 28,350
Equity dividends paid (note 4) (6,510) (7,358) (14,754)
Repurchase of shares into Treasury (18,717) (8,275) (19,731)
Proceeds from share forfeiture 412 - -
Interest paid (18) (26) (52)
Net cash outflow from financing activities (24,833) (15,659) (34,537)
Increase/(decrease) in cash and cash equivalents 2,915 (2,558) (1,064)
Cash and cash equivalents at start of period/year (851) 454 454
Exchange movements 8 65 (241)
Cash and cash equivalents at end of period/year 2,072 (2,039) (851)
Cash and cash equivalents consist of:
Cash and short term deposits 1,629 - 199
Overdrafts - (2,047) (1,058)
Cash held in USD Liquidity Fund 443 8 8
Total 2,072 (2,039) (851)
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 31ST MARCH 2024
1. Financial statements
The information contained within the financial statements in this half year
report has not been audited or reviewed by the Company's auditor.
The figures and financial information for the year ended 30th September 2023
are extracted from the latest published financial statements of the Company
and do not constitute statutory accounts for that year. Those financial
statements have been delivered to the Registrar of Companies and included the
report of the auditors which was unqualified and did not contain a statement
under either section 498(2) or 498(3) of the Companies Act 2006.
2. Accounting policies
The financial statements are prepared 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 July 2022.
FRS 104, 'Interim Financial Reporting', issued by the Financial Reporting
Council ('FRC') in March 2015 has been applied in preparing this condensed set
of financial statements for the six months ended 31st March 2024.
All of the Company's operations are of a continuing nature.
The accounting policies applied to this condensed set of financial statements
are consistent with those applied in the financial statements for the year
ended 30th September 2023.
3. Return/(loss) per share
(Unaudited) (Unaudited) (Audited)
Six months ended Six months ended Year ended
31st March 2024 31st March 2023 30th September 2023
£'000 £'000 £'000
Return per share is based on the following:
Revenue return 849 1,442 4,640
Capital return 11,073 37,133 16,184
Total return 11,922 38,575 20,824
Weighted average number of shares in issue 88,580,256 95,014,494 93,970,338
Revenue return per share 0.96p 1.52p 4.94p
Capital return per share 12.50p 39.08p 17.22p
Total return per share 13.46p 40.60p 22.16p
4. Dividends paid
(Unaudited) (Unaudited) (Audited)
Six months ended Six months ended Year ended
31st March 2024 31st March 2023 30th September 2023
£'000 £'000 £'000
Dividends paid
Unclaimed dividends returned to the Company (210) - -
2023 second quarterly dividend of 4.0p - - 3,771
2023 third quarterly dividend of 3.9p - - 3,625
2023 fourth quarterly dividend of 3.8p (2022: 3.7p) 3,450 3,569 3,569
2024 first quarterly dividend of 3.7p (2023: 4.0p) 3,270 3,789 3,789
Total dividends paid in the period/year 6,510 7,358 14,754
A second interim dividend of 3.9p has been declared for payment on 24th May
2024 for the financial year ending 30th September 2024.
Dividend payments in excess of the revenue amount will be paid out of the
Company's distributable reserves.
5. Net asset value per share
(Unaudited) (Unaudited) (Audited)
Six months ended Six months ended Year ended
31st March 2024 31st March 2023 30th September 2023
Net assets (£'000) 331,727 381,434 344,829
Number of shares in issue (excluding shares held 85,416,628 94,279,354 91,024,771
in Treasury)
Net asset value per share 388.4p 404.6p 378.8p
6. Fair valuation of instruments
The fair value hierarchy disclosures required by FRS 102 are given below:
(Unaudited) (Unaudited) (Audited)
Six months ended Six months ended Year ended
31st March 2024 31st March 2023 30th September 2023
Assets Liabilities Assets Liabilities Assets Liabilities
£'000 £'000 £'000 £'000 £'000 £'000
Level 1 329,501 - 379,516 - 342,500 -
Level 2(1) 310 - 334 - 329 -
Total value of instruments 329,811 - 379,850 - 342,829 -
(1) The Level 2 disclosure represents the investment in Berlian Laju Tanker.
7. Analysis of Changes in Net (Debt)/Cash
As at As at
30th September Exchange 31st March
2023 Cash flows movements 2024
£'000 £'000 £'000 £'000
Cash and cash equivalents
Cash 199 1,422 8 1,629
Cash equivalents 8 435 - 443
207 1,857 8 2,072
Borrowings
Bank overdraft (1,058) 1,058 - -
Net (debt)/cash (851) 2,915 8 2,072
JPMORGAN FUNDS LIMITED
29th May 2024
For further information, please contact:
Anmol Dhillon
For and on behalf of
JPMorgan Funds Limited
Telephone: 0800 20 40 20 or or +44 1268 44 44 70
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.
ENDS
A copy of the half year will be submitted to the National Storage Mechanism
and will shortly be available for inspection at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism)
The Half Year Report will also shortly be available on the Company's website
at www.jpmasiagrowthandincome.co.uk (http://www.jpmasiagrowthandincome.co.uk)
where up to date information on the Company, including daily NAV and share
prices, factsheets and portfolio information can also be found.
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. END IR SEWFAUELSELI