FINAL RESULTS FOR YEAR TO 31 DEC 2023
21/03/2024 07:00
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RNS Number : 7116H JPMorgan Claverhouse IT PLC 21 March 2024
LONDON STOCK EXCHANGE ANNOUNCEMENT
JPMORGAN CLAVERHOUSE INVESTMENT TRUST PLC
FINAL RESULTS FOR THE YEAR ENDED 31ST DECEMBER 2023
Legal Entity Identifier: 549300NFZYYFSCD52W53
Information disclosed in accordance with the DTR 4.1.3
The Directors of JPMorgan Claverhouse Investment Trust plc (the "Company")
announce the Company's results for the year ended 31st December 2023.
CHAIRMAN'S STATEMENT
Performance and Manager Review
Conditions underpinning the UK market improved considerably in the second half
of the Company's financial year ended 31st December 2023, with its benchmark,
the FTSE All-Share index (the 'Benchmark'), generating a total return of 7.9%
over the 12-month period. Supportive factors over the latter six months of the
year included a marked easing in inflation pressures, which raised hopes that
the Bank of England will begin to cut rates this year. Despite this, the UK
economy dipped into a shallow recession at the end of 2023, although consumer
and business confidence had been showing tentative signs of improvement and
this has continued into 2024.
This more favourable environment, together with the changes that the Portfolio
Managers made to the portfolio in the first half of the Company's financial
year, in particular its cyclical investments, contributed to an out-
performance against the Benchmark in the second half of the year and, overall
to the Company's 7.3% return on a net asset value ('NAV'), with debt at par
value for the year ended 31st December 2023, which was marginally below its
Benchmark. The share price total return was 2.9%, reflecting the widening of
the discount at which the Company's shares traded relative to its NAV. As
noted in the Company's Half Year Report, the discount widening occurred at the
start of the financial year, partially as a result of JPMorgan Elect plc
divesting its holding in the Company following its combination with JPMorgan
Global Growth & Income plc. The Company has been active with its share
buyback authority. Please see below for further details.
Whilst the Company's NAV has marginally underperformed its Benchmark over the
year to 31st December 2023, the Board assesses the performance of the
Investment Manager over the medium and long term. In regard to the
performance, on NAV with debt at par the Company has been slightly behind the
Benchmark over five and ten years. With debt at fair value, the Company is
slightly ahead of the Benchmark over five and ten years' performance. Your
Board reviews the strategy and performance at every Board meeting and
continues to remain fully supportive of the strategy, the Portfolio Managers,
and the investment process.
The Investment Manager's Report below provides more detail on performance
during 2023 and discusses the outlook for 2024.
As at 19th March 2024, the Company's NAV per share (with debt at fair value)
was 713.4p and the share price was 672.0p.
Revenue and Dividends
The Directors declared a fourth quarterly interim dividend of 10.5p per share
for the year ended 31st December 2023, paid on 1st March 2024, which brought
the total dividend per share for the year to 34.5p (2022 total: 33.0p), an
increase of 4.5% on the prior year. I am pleased to say that this is the
51st successive year in which the dividend has been raised, a record which
only very few investment trusts have attained, and at a time with elevated
core inflation and a stagnated UK economy.
The Board's dividend policy remains to seek to increase the dividend each year
and, taking a run of years together, to increase dividends at a rate close to,
or above, inflation. Following the payment of the fourth interim dividend for
2023, the Company will have continued to have paid dividends in excess of
inflation over the past five years. Although UK inflation has now fallen
sharply from its recent, 30-year high, the Board will, as always, carefully
monitor the outlook for dividend income, to ensure it can continue to fulfil
its dividend policy objectives.
The Company has a significant level of revenue reserves, accumulated over a
number of years, and as an investment trust, it has the ability to utilise
these reserves if necessary to support its long-term dividend policy. After
the payment of the fourth interim dividend for 2023, revenue reserves will
represent 25.35p per share(1). The Board intends to raise the first three
quarterly interim dividends in 2024 to 8.25p per share, from 8.0p per share in
the previous financial year, subject to any unforeseen factors and the
financial position and performance of the Company at the relevant time.
(1) Based on the number of shares in issue as at 19th March 2024.
Premium/Discount and Share Issuance/Repurchases
During the year, the discount at which the Company's shares traded relative to
its NAV with debt at fair value ranged from a high of 6.84% to a low of 0.46%,
excluding on 2nd January 2023 when the Company's share price peaked and traded
at a premium of 0.27%. The Board's objective is to use the Company's
repurchase and allotment authorities to actively manage short-term imbalances
between the supply and demand of the Company's shares, with the intention of
reducing the volatility of the discount or premium, in normal market
conditions. To this end, over the past year, the Company repurchased 2,360,513
of its own shares, at a total cost of £15.7 million.
As at 31st December 2023, the Company's discount (to its cum-income, debt at
fair value, NAV) was 4.6%, Since then, the discount has widened slightly and
the Board has continued to utilise targeted repurchases to cap the discount,
buying in a total of 331,883 shares as at the date of this report.
At the time of writing, the discount stands at 5.80%(1). The Board intends to
continue to actively manage the Company's discount in its commitment to seek a
stable discount or premium over the long-term, whilst recognising that
consistent and strong investment performance remains a core focus for the
Company's shares to trade close to NAV over the long-term. Please see the full
Annual Report for the Board's discount and premium management policy.
At this year's Annual General Meeting in April 2024, the Company will be
seeking renewed authorities from shareholders to sell shares from Treasury at
a discount, to issue new shares and to repurchase its own shares.
(1) As at 19th March 2024
Gearing/Long Term Borrowing
The Portfolio Managers can use FTSE 100 index futures to effect increases and
reductions in the level of gearing by changing the portfolio's market
exposure. The Company's gearing policy (excluding the effect of any futures)
is to operate within a range of 5% net cash and 20% geared in normal market
conditions. The Portfolio Managers have discretion to vary the gearing level
between 5% net cash and 17.5% geared (including the effect of any futures).
The Board believes that over the long-term a moderate level of gearing is an
efficient way to enhance shareholder returns.
Taking borrowings into account, net of cash balances held and the effect of
futures, the Company ended 2023 approximately 6.3% geared. During the year,
gearing varied between 0.6% net cash and 8.9% geared. Excluding the effect of
the futures, the maximum gearing reached during the year was 10.9%. Gearing is
currently 6.8%(1). The Company has a £30 million 3.22% private placement
note, maturing in March 2045. In addition, £10 million of the revolving
credit facility with Mizuho Bank was drawn down as at 31st December 2023. See
note 13 in the full Annual Report. The facility with Mizuho Bank will mature
in May 2024 and the Manager has identified a preferred option for a new
facility with attractive margins.
(1) As at 19th March 2024
Environmental, Social and Governance
Financially material Environmental, Social and Governance ('ESG') factors have
been integrated into the Investment Manager's investment process over recent
years, and these issues are considered as part of the decision making in
whether to invest in a stock. The Board receives regular ESG updates from the
Investment Manager.
The Annual Report includes a separate Environmental, Social and Governance
Report from the Investment Manager in the full Annual Report which provides
information on these issues and how they have been developed and integrated
into the Investment Manager's investment process.
Investment Management Fees and Manager Evaluation
As reported in the Company's Half Year Report, the investment management fee
is charged on a tiered basis at an annual rate of 0.45% of the Company's net
assets on the first £400 million and at 0.40% of net assets above that
amount, having been reduced with effect from 1st July 2023.
During the year under review, the Management Engagement Committee undertook a
formal review of the Manager and Investment Manager, covering the investment
management, company secretarial, administrative and marketing services
provided to the Company. The review took account of the Investment Manager's
investment performance record, management processes, investment style,
resources and risk control mechanisms. I am pleased to report that the Board
agreed with the Committee's recommendation that the continued appointment of
the Manager is in the interests of shareholders.
Board Succession
I have served as a member of the Company's Board since 2015, and I had the
honour to be appointed Chairman of your Board in April 2022. I plan to stand
down from the Board at the time of next year's Annual General Meeting. The
Nomination Committee of the Company chaired by the Senior Independent
Director, excluding me, has been considering the Company's succession plan and
I am pleased to report that Victoria Stewart, a Director of the Company since
February 2020, has been appointed to succeed me as Chair of the Board in April
2025. Work has begun to identify a further suitable candidate to join the
Board, and announcements on the result of this search, and the appointment of
an additional new Director, will be made in late 2024.
Shareholder Engagement
The Board and the Portfolio Managers are keen to increase dialogue with the
Company's existing shareholders, particularly as the Board believes that
shareholder interactions are very helpful in assisting with the management of
the Company. During the past year, the Portfolio Managers held regular calls
with shareholders where requested and also presented periodic webinars,
replays of which are available on the Company's website. Portfolio and market
updates are available on the Company's website.
Investors holding their shares through online platforms will shortly receive a
letter inviting them to sign up to receive email updates from the Company.
These updates will deliver regular news and views, as well as the latest
performance statistics. If you have not already signed up to receive these
quarterly communications and you wish to do so, you can opt in via
https://tinyurl.com/JCH-Sign-Up or by scanning the QR code on the contents
page in the full Annual Report.
Annual General Meeting
We are delighted that once again we will be holding this year's Annual General
Meeting in person at JPMorgan's offices at 60 Victoria Embankment, London EC4Y
0JP, on Monday, 29th April 2024, at 12 noon. The Company's Portfolio
Managers, William Meadon and Callum Abbot, will give a presentation to
shareholders, reviewing the past year and commenting on the outlook for the
current year. The meeting will be followed by a sandwich lunch, providing
shareholders with the opportunity to meet the Directors and representatives of
the Manager. We look forward to welcoming as many shareholders as possible at
the Annual General Meeting.
For shareholders wishing to follow the Annual General Meeting proceedings, but
choosing not to attend in person, we will be able to welcome you through
conferencing software where you can follow the proceedings but not vote on the
business of the meeting. Details on how to register, together with access
details, will be available on the Company's website: www.jpmclaverhouse.co.uk,
or by contacting the Company Secretary at invtrusts.cosec@jpmorgan.com.
As is normal practice, all voting on the resolutions will be conducted by a
poll. Shareholders viewing the meeting via conferencing software will not be
able to vote on the poll and we therefore encourage all shareholders, and
particularly those who cannot physically attend, to exercise their votes in
advance of the meeting by completing and submitting their form of proxy.
If you have any detailed or technical questions, it would be helpful if you
could raise them in advance with the Company Secretary either in writing to 60
Victoria Embankment, London EC4Y 0JP, via email at
invtrusts.cosec@jpmorgan.com or via the 'Ask a Question' link on the Company's
website. Shareholders who are unable to attend the Annual General Meeting are
encouraged to use their proxy votes. Proxy votes can be lodged in advance of
the Annual General Meeting either by post or electronically, detailed
instructions are included in the Notes to the Notice of Annual General Meeting
in the full Annual Report. Completion of a proxy card and its return will not
preclude you from attending the meeting and voting in person.
If there are any changes to the arrangements for the Annual General Meeting,
the Company will update shareholders through the Company's website and, if
appropriate, through an announcement on the London Stock Exchange.
Outlook
The good news is that the UK economy seems to be over the worst of its
inflation and cost-of-living crisis. The Board therefore shares the Portfolio
Managers' cautious optimism about the outlook for the market and the Company
in 2024 and beyond. There are several reasons for our optimism. For one, the
Portfolio Managers have been actively positioning the portfolio to take
greater advantage of better times ahead. For example, they have increased
exposure to rising demand for entertainment and travel, and added several
holdings within the real estate sector, which they expect to benefit from
lower interest rates.
UK equity valuations still remain extremely attractive in absolute terms and
relative to other markets. This provides investors, both in the UK and abroad,
with what the Portfolio Managers believe is a rare opportunity to enter this
market at historically low valuations, with attractive dividend yields. This
suggests that there is scope for significant market gains as and when
investors' confidence in this market returns, and their focus shifts back to
long-term company fundamentals.
The geopolitical outlook remains worrying, with the conflict in Ukraine
seemingly no closer to resolution and the conflict in the Middle East
threatening to spread across the region. November's US presidential election
has potentially broader implications than usual for the global order and there
are also elections taking place in several other countries and regions this
year, including the UK and Europe. Whilst all these factors are well known,
any dramatic or unexpected developments in any of these situations will likely
spark an increase in market volatility.
We have experienced Portfolio Managers who are working hard to preserve and
grow shareholders' assets. We believe their continuing efforts, combined with
a diversified portfolio of high-quality stocks and a disciplined investment
approach, mean the Company is well-positioned to continue delivering
attractive returns and a growing income to shareholders over the long term.
On behalf of the Board, I thank you, our shareholders, for your continued
support.
David Fletcher
Chairman
20(th) March 2024
INVESTMENT MANAGER'S REPORT
Investment Approach
Claverhouse is a diversified portfolio of our best UK ideas, comprising both
quality, growth and value stocks. For the patient investor, we believe that
this approach will produce outperformance of the Benchmark in a steady,
consistent manner, irrespective of market conditions. We aim to maintain
Claverhouse's multi-decade dividend growth record.
Market Review
The start of the year saw a cloud of rapidly rising inflation and interest
rates hanging over UK equities. However, the second half of the year saw
inflationary fears abate slightly, causing equities and gilts to rally. By the
end of the year the Benchmark, while lagging most overseas markets, showed
a positive total return over the 12 months of 7.9%.
Both the rapid demise of Credit Suisse and the collapse of the west coast
American bank, Silicon Valley Bank ('SVB') in the spring rattled global
markets. However, investors soon concluded that another systemic banking
crisis was unlikely causing a relief rally in equities.
Despite a further fall in oil and gas prices, UK inflation continued to
disappoint, peaking in February at 10.4%. Core inflation (i.e. inflation
excluding food and energy) peaked at 7.1% in May, the highest since 1992. By
August, the Bank of England had raised interest rates from 3.0% to 5.25%,
where they remained for the rest of the year. The latter part of the year saw
an improvement in inflation, fuelling a year end rally in the stock market as
investors anticipated material cuts in interest rates in 2024.
The end of year rally was characterised by a significant broadening of the
equity market, which prior to October had been remarkably narrow in its
leadership.
Political turmoil was a feature of the year and created a challenging back
drop for investors. By the end of the year, investors were focusing on
impending elections in both the UK and the US. Opinion polls suggested that
Labour was on course for a landslide victory in the UK. In the US, Donald
Trump was the early favourite to be returned to the White House. The Ukraine
war remained locked in a bloody stalemate whilst events in the Middle East in
October added a significant further layer of geo-political concerns for
investors.
Throughout the year, equity markets were highly sensitive to macro data
points, particularly inflation and central bank announcements. At times, new
data points drove significant changes in market leadership, which meant that
the market did not trend but was instead erratic during the year.
A volatile year concluded with the Benchmark rising 7.9% over the 12 months.
The UK market continues to present exceptional value and while a catalyst is
difficult to predict we believe patient investors will eventually be rewarded.
Performance Review
The portfolio performed steadily throughout the year and turnover was lower
than 2022. Your Company's risk-controlled approach to sizing positions at both
a stock and sector level helped the portfolio navigate its way through
challenging times, whilst delivering a dividend increase for the
51st consecutive year.
In the year to 31st December 2023, Claverhouse delivered a total return on net
assets (capital plus dividends re-invested) of 7.3% compared to the
Benchmark's return of 7.9%. With the Company's shares ranging from a premium
of 0.27%(1) on 2nd January 2023 to end the year at a discount of 4.6%(1), the
total annual return for shareholders was 2.9%. With the improving prospects
for both falling inflation and interest rates as the year progressed, the
portfolio's cyclical holdings performed particularly well.
(1) Share price discount to net asset value with debt at fair value.
3i was again the star performer, rising 85% over the year (see later for a
more detailed update). The shares of the housebuilders Taylor Wimpey and
Barratt Developments each rose by more than 50% as the long awaited
improvement in the housing market appeared to draw closer.
The utility service provider, Telecom Plus was a beneficiary, earlier in the
year, of elevated energy prices, allowing it to offer their customers
discounted prices to market rates. However, as energy prices receded, so did
the customer acquisition growth of Telecom Plus, which was reflected in a
share price fall of 30% over the period.
Further detail of Claverhouse's performance over the year is given in the
below performance attribution table.
Performance attribution
Year ended 31st December 2023
% %
Contributions to total returns
Benchmark return +7.9
Stock & Sector selection -0.1
Gearing & cash +0.2
Investment Manager contribution +0.1
Cost of debt -0.2
Portfolio total return +7.8
Management fee/other expenses -0.7
Share buyback +0.2
Sub total -0.5
Return on net assets with debt at par value(A) +7.3
Change in the fair value of the long term debt(1) -0.1
Return on net assets with debt at fair value(A) +7.2
Source: JPMAM/Morningstar. All figures are on a total return basis.
Performance attribution analyses how the Company achieved its recorded
performance relative to its Benchmark.
(1) Reflects the effect of fair value of the 3.22% £30 million
private placement loan. The fair value has been calculated using discounted
cash flow techniques, using the yield from similar dated gilt plus a margin
based on the five year average for the AA Barclays Sterling Aggregate
Corporate Bond spread.
(A) Alternative Performance Measure ('APM').
A list of APMs, with explanations and calculations, and a glossary of terms
are provided on pages 100 to 102 of the full Annual Report.
The Company delivered a dividend increase for the 51st consecutive year, a
notable milestone. Dividends in respect of the financial year ended 31st
December 2023 totalled 34.5p per share, a 4.5% rise on the previous year's
dividend of 33.0p per share. The dividend yield in respect of the year
is 5.1% (based on the share price of 672.0p as at 19th March 2024).
The Company benefitted from its holdings in Financials, particularly 3i Group,
which was the stand-out performer. Utilities and Housebuilders also performed
well. By contrast, Tobacco, Travel & Leisure and Life Assurance performed
relatively poorly. There was little difference between the overall performance
of large FTSE100 stocks and mid/small cap stocks. More detail is given in the
table below:
Top Contributors and Detractors to Performance vs FTSE All-Share Index
Top Five Contributors Top Five Detractors
3i Group +1.6% Telecom Plus -0.4%
Centrica +0.6% Glencore -0.3%
BAE Systems +0.4% AstraZeneca -0.3%
Taylor Wimpey +0.3% Drax Group -0.3%
Barratt Developments +0.2% British American Tobacco -0.3%
Source: JPMAM, as at 31st December 2023.
Shell again performed well as the ongoing conflict in Ukraine continued to
expose the fragility of global energy markets. BP, by contrast, was shaken by
a series of management missteps and scandals which led to the departure of its
CEO. The shocking events in the Middle East added further to global conflict
concerns. Against such a backdrop, the UK's leading defence contractor, BAE
Systems, benefitted from the expectation of further orders for its equipment.
Glencore is a diversified mining company with substantial exposure to metals
which are essential for the electrification of vehicles e.g. copper, zinc and
nickel. Its shares performed poorly as the economic data coming out of China
pointed to continuing weak demand from the world's largest commodity consumer.
Tobacco stocks (British American Tobacco and Imperial Brands) sold off on
weaker North American cigarette volumes with investors still not attracted to
historically very low valuations.
JPMorgan UK Small Cap Growth & Income plc (formerly JPMorgan UK Smaller
Companies Investment Trust plc), run by JPMAM's in-house small companies'
team, performed well. Over the years, this trust has not only contributed
materially to the performance of Claverhouse, but as stocks have grown out of
the smaller companies' index and into the FTSE 350, it has also provided a
rich source of many new ideas for us to invest in directly.
Portfolio Review
The portfolio held 65 stocks at the end of the year, which was towards the
lower end of our normal range. The portfolio was geared throughout the year
but less than historically was the case. We are bottom-up stock pickers;
sector and macro views have less influence on the portfolio. This said, in
2023, geopolitical and macro issues were of much more concern to investors
than usual. Whilst we are stock-focused we do run a sector-diversified
portfolio.
We used FTSE 100 futures to manage gearing. At the year-end, your Company was
6.3% geared.
Top Over and Under-Weight Positions vs FTSE All Share Index
Top Five Overweight Positions Top Five Underweight Positions
SSE +2.7% Diageo -1.5%
3i Group +2.6% Barclays -1.0%
Shell +1.9% National Grid -1.0%
BAE Systems +1.9% Unilever -1.0%
Glencore +1.6% Reckitt Benckiser -0.9%
Source: JPMAM, as at 31st December 2023.
Purchases
As consumer confidence continued to improve post Covid, the Company increased
its exposure to the travel industry through purchases of Premier Inn owner
Whitbread, and packaged holiday provider JET2, both of which are now well
placed to take advantage of the resultant supply shortage. Surging demand has
led to a very favourable pricing environment for airlines and hotels which we
expect to continue, especially in the budget part of the market where these
two companies operate, as consumers become more price sensitive.
Georgia has benefitted from a huge influx of affluent Ukrainians and Russians
fleeing the war. This has led to a surge in the Georgian economy and a
thriving banking sector as deposits have grown. Bank of Georgia and TBC Bank,
both of which are listed on the UK stock market, operate a duopoly in this
market, which lends itself to very favourable economics for both banks. As a
result, both earn returns on equity of between 20% to 30% and have
consistently created value for shareholders. Their balance sheets are in
strong positions, with core equity tier 1 ratios in the high teens, which
should allow them to continue to return substantial capital to shareholders.
Both positions were bought at under five times of the price earning ratio. The
purchases were funded by sales of other banks in the sector; NatWest and
Barclays.
We added new positions in the technology sector. Bytes Technology Group is an
IT services company and is a direct peer of another Claverhouse holding,
Softcat. It is a highly fragmented market and both Softcat and Bytes have a
strong track record of acquiring market share. Their asset light business
models lead to strong returns on incremental capital and superb cash
generation. Technology being more deeply integrated in businesses of all
shapes and sizes should be a structural tailwind for these companies for
decades to come.
Games Workshop is the producer of miniature figurines for the table-top game,
Warhammer. We have re-purchased the stock after we identified some positive
catalysts for the business. Recently, it has begun licensing their
intellectual property for video games and movies which is extremely high
margin business for Games Workshop. Growth is also set to re-accelerate as
they release the next iteration of their bestselling video wargame; Warhammer
40k collection.
Dividends are a key consideration for portfolio holdings and M&G's near
10% dividend yield was viewed as very attractive. M&G is an asset manager
and closed book life insurance company. The yield is covered by its
with-profits business with potential upside to the dividend from a turnaround
elsewhere in its business. As a result, we believe it looks too cheap.
We made two new purchases on the back of new management changes delivering
much improved operational performance in these two companies. Rolls-Royce, an
aerospace & defence company, specialises in turbines for aircrafts and
power systems for a range of industrial end markets. Rolls-Royce shareholders
have suffered over the last decade due to serial mismanagement and poor
capital allocation. The new management team have made demonstrable changes to
the business and the cyclical recovery in aerospace is a strong tailwind.
However, given the chequered history, the jury is still out as to whether the
turnaround will work. Marks & Spencer is undergoing a strategic overhaul
which aims to make it more relevant for a broader range of consumers. Progress
has been slow, but it now appears that Marks & Spencer has made
significant headway with the end consumer. This has led to several large
upgrades to management's guidance in quick succession and we think there could
be more to come.
One of the key themes in the second half of 2023 was improving (falling)
inflation data, which led to central banks signalling that further rate hikes
may not be required. As the economic data began to suggest that we were
approaching peak rates, we looked to close our successful underweight in real
estate investment trusts (REITs). REITs' property valuations have been under
pressure as property yields have been forced upwards with the increase in
interest rates. This led to extremely negative sentiment towards the sector
and discounts to net asset values not seen in the last decade. We started new
holdings in Land Securities, British Land, Shaftesbury Capital and Workspace,
funded by the sale of the position in the less cyclical Safestore.
Admiral is a UK motor insurer with an impressive long term track record of
value creation for shareholders. The UK motor insurance sector has been
battling with repair/replacement cost inflation but finally appears to have
sufficiently offset this with price increases which should lead to a period of
elevated profitability.
We topped up several existing positions which are continuing to deliver
operationally. For example, Centrica is benefitting from the benign
competitive environment for British Gas, after many of its competitors went
bust in 2022, while the high volatility in energy prices is a prime
environment for Centrica's energy trading division. Ashtead is an equipment
rental business which looks extremely well placed to capitalise on the wave of
the so called 'mega-projects' which are taking place in the US to facilitate,
among other themes, onshoring and the energy transition. 3i Group announced
that its portfolio company, discount retailer Action, continues to take market
share as price sensitive consumers look for cheaper places to shop.
Historically this environment has been ideal for discounters and customers
have been surprisingly loyal once the backdrop improves.
Please see the full annual report for highlighted companies in the portfolio.
Sales
Bunzl is a distributor of single use products, which can pass through all cost
inflation to its end customers, leaving it well placed in the current
inflationary environment. However, price deflation would be a significant
headwind for earnings and the stock is trading at close to peak multiples, so
we decided to exit our holding in response to evidence that inflation may have
peaked.
Serica, an oil and gas explorer and producer, announced a large acquisition of
another oil and gas explorer and producer which called into question the
capital discipline of the management team. Therefore, after collecting the
quarterly dividend, we sold the stock.
The New York Stock Exchange became CRH's primary listing venue during the
year. Whilst it remains listed on the London Stock Exchange, we exited the
position due to this change in primary listing to the USA as our investment
restrictions and guidelines prohibited us from holding the shares once CRH had
changed its primary listing from the UK.
Positions in both Telecom Plus and Drax were sold as each struggled to cope
with falling power prices in the second half of the year. Drax is a
self-titled 'renewable energy company'. It predominantly generates electricity
by burning biomass pellets, which are produced in Drax's pellet plants in the
US, and then shipped to the UK. It is also a leader in carbon capture
technology. Drax has benefitted from elevated power prices in the UK, but it
has struggled to secure Government approval for its carbon capture plans.
While it is optically cheap, the reinvestment risk remains high and fraught
with regulatory risk. Telecom Plus, was a beneficiary of elevated energy
prices as it was able to offer prices at a discount to market rates. However,
as energy prices have receded, so has the customer acquisition growth of
Telecom Plus. The story has shifted to being about diversifying the business
into adjacent areas (e.g. broadband and mobile) and we no longer feel the
growth prospects are as strong.
A number of management teams at the luxury goods retailer, Burberry have
failed to reinvigorate the brand and without a strong tailwind from the
Chinese consumer, it looks like it will take a while for signs of success to
emerge. We therefore sold the stock.
We have exited the small position in Balfour Beatty, the construction
contractor. It quickly re-rated after our initial purchase in August 2022, so
we never got a chance to add to the position. We are less convinced on the
outlook.
Please see the full annual report for highlighted companies in the portfolio.
Environmental, Social, and Governance ('ESG')
Whilst Claverhouse holds stocks based primarily on companies' fundamentals, we
also consider the potential impact of financially material ESG factors on a
company's ability to deliver shareholder value. We assess each company's
strategy for dealing with these important matters and the consequent risks
arising from them. Our analysis helps determine whether relevant ESG factors
are financially material and, if so, whether they are reflected in the
valuation of the company. Such analysis may influence not only our decision to
own a stock but also, if we do, the size of that position in the portfolio.
Company meetings continue to be an important opportunity to engage with our
portfolio companies on ESG issues. Examples of our engagement with companies
during the year and details of our voting record are set out in the ESG Report
in the full Annual report.
Market Outlook
Whilst there remain significant geopolitical challenges for investors to
consider (such as the ongoing conflict in the Ukraine and the Middle East
tensions), there are some reasons for cautious optimism in 2024. The global
economy, driven by the US, continues to expand. Inflation in the developed
world is now falling with the consequent prospect that central banks will soon
start to cut interest rates. Despite the improved economic outlook, the UK
equity market remains exceptionally attractively valued.
Against such a gently improving economic backdrop, your Company remains a
modestly-geared portfolio that uses a barbell approach of owning both
attractively valued, high yielding stocks, as well as growth stocks. Our
barbell approach is naturally diversifying, and our portfolio is currently
focused on robust, liquid, globally-diversified blue-chip, UK listed stocks.
After a challenging period, which has reflected the variable macro
environment, a more benign outlook should suit our bottom up investment
process. We remain confident that such an approach will deliver both growth of
capital and income in a consistent manner for our shareholders.
For and on behalf of the Investment Manager
William Meadon
Callum Abbot
Portfolio Managers
20(th) March 2024
PRINCIPAL AND EMERGING RISKS
The Board, through delegation to the Audit Committee, has undertaken a robust
assessment and review of the principal risks facing the Company, together with
a review of any new and emerging risks that may have arisen during the year to
31st December 2023, including those that would threaten its business model,
future performance, solvency or liquidity.
With the assistance of the Manager, the Audit Committee has drawn up a risk
matrix, which identifies the key risks to the Company, as well as emerging
risks. The risk matrix, including emerging risks, are reviewed formally by the
Audit Committee every six months or more regularly as appropriate. During the
year under review, the Audit Committee worked extensively with the Manager to
review and update the risk matrix. At each meeting, the Board considers
emerging risks which it defines as potential trends, sudden events or changing
risks which are characterised by a high degree of uncertainty in terms of
occurrence probability and possible effects on the Company. As the impact of
emerging risks is understood, they may be entered on the Company's risk matrix
and mitigating actions considered as necessary. In assessing the risks and how
they can be mitigated, the Board has given particular attention to those risks
that might threaten the viability of the Company. These key and emerging risks
are listed below:
Movement
Principal risk Description Mitigating Activities During the Year
Cybersecurity Threat of cyber-attack, in all its guises such as hacking, malware, ransomware The Company benefits directly or indirectly from all elements of JPMorgan's To date, the Manager's extensive cyber security arrangements are in operation.
etc is regarded as at least as important as more traditional physical threats cyber security programme. The Directors scrutinise the Manager's internal
to business continuity and security. In addition to threatening the Company's controls to assure the Board that the Company's data is appropriately
operations, such an attack is likely to raise reputational issues which may protected and give assurance over monitoring of outsourcers. The controls
damage the Company's share price and reduce demand for its shares. around the physical security of JPMorgan's data centres, security of its
networks and security of its trading applications are tested by the
independent reporting auditor and reported on every six months against the AAF
01/06 Standard.
Share price discount to NAV The shares of the Company are traded freely and are therefore subject to the The Board seeks to narrow the discount by undertaking measured buybacks of the The Board continued to use targeted buybacks of the Company's own shares to
influences of supply and demand and investors' perception to the markets the Company's shares taking account of market conditions and having established manage the discount at which the Company's shares traded.
Company invests in. The share price is therefore subject to fluctuations and explicit guidelines.
like all investment trusts may trade at a discount to the NAV which could lead
to significant buyback activity and a reduction in the size of the Company. The Company and Manager work with the Corporate Broker to understand demand
for the Company's shares.
Market factors such as interest rates, inflation and equity market performance Market factors such as interest rates, inflation and equity market performance The Board monitors the implementation and results of the investment process The UK economy has been affected by high inflation, which has been more
may impact the value of investments and the performance of the Company. and regularly discusses portfolio positioning with the portfolio management persistent in the UK than elsewhere. This has continued to impact the UK
team. The Board has set investment restrictions and guidelines, which are equity market.
monitored and reported on by the Investment Manager.
The Board monitors the changing risk landscape and potential threats to the
Company with the support of regular reports and ad hoc reports as required,
the directors' own experience and external insights gained from industry and
shareholder events.
Strategy and Performance Inappropriate or poorly executed investment or business strategy, for example The Board manages these risks by setting its objectives carefully and through The Company continues to pursue its investment objective in accordance with
asset allocation or the level of gearing, may lead to underperformance against diversification of Investments. The Company operates various investment the agreed strategy.
the Company's benchmark index and peer companies, resulting in the Company's restrictions and guidelines designed to ensure that the mandate given to the
shares trading on a wider discount. Investment Manager is properly executed and these guidelines are monitored and The Board continued to monitor the performance of the portfolio over the year
reported on by the Manager. under review. The Board is aware that performance has been modestly weaker
against the Benchmark for the year and over the longer term.
The Board monitors the implementation and results of the investment process
with the Portfolio Managers, who attend all Board meetings, and reviews data
which show statistical measures of the Company's risk profile. The Investment
Manager has been delegated powers from the Board to determine appropriate
levels of gearing within a strategic range set by the Board.
The Board holds a separate meeting devoted to strategy each year which
includes a review of the Company's mandate and the investment environment.
Legal and Regulatory/ Corporate Governance As an investment trust, the Company's operations are subject to wide ranging The Company, through the Manager, has procedures to monitor the status of its The Company continued to adhere to relevant requirements.
regulations. The financial services sector continues to experience significant compliance with all relevant requirements which include maintaining its
regulatory change at national and international levels. Failure to act in Investment Trust status. These cover receiving and reviewing information and
accordance with these regulations could cause fines, censure or other losses reporting from the Manager and Investment Manager. The Depositary (The Bank of
including taxation or reputational loss. Breach of Company Law or UK Listing New York Mellon (International) Limited) reports regularly on third party
Rules resulting in suspension. service providers and their compliance with expected standards of performance
and these reports are reviewed by the Audit Committee.
Climate change The risk or impact of climate change may be higher than currently estimated or The Board receives ESG reports from the Investment Manager on the portfolio The Investment Manager has responsibility for ESG.
the increase may be more significant than currently planned. This could have and how financially material ESG considerations are integrated into investment
varying impacts on the business models, sustainability and viability of decision making so as to mitigate risk at the level of stock selection and Whilst the Company is not a sustainable or ESG investment vehicle, a broader
individual companies, whole sectors and even asset classes. portfolio construction. The analysis conducted by the Investment Manager view of sustainability remains a part of the investment process. Please see
includes the approach investee companies take to recognising and mitigating the full Annual Report for the ESG Report.
climate change risks.
The Board also considers the threat posed by the direct impact on climate
change on the operations of the Manager, Investment Manager and other major
service providers. As extreme weather events become more common, the
resilience, business continuity planning, and the location strategies of the
Company's services providers will come under greater scrutiny.
Geopolitical and macro-economic There is an increasing risk to market stability and investment environment The Investment Manager continuously monitors geopolitical developments and The rise in geopolitical tensions contributed to volatility and economic
from actual or potential geopolitical conflicts (for example, the Russian societal issues relevant to its business. These are also considered as part of disruption over the year.
invasion of the Ukraine, as well as growing tensions in Southeast Asia and in portfolio construction. The Company is a closed-end vehicle and, unlike
the Middle East following the conflict between Hamas and Israel), which may open-ended funds, does not have to sell investments at low valuations in
impact both investment performance and/or the operating environment for the volatile markets.
Company, Manager, Investment Manager or the Company's other third party
service providers.
Loss of Investment Team Loss of key staff by the Investment Manager, such as the Portfolio Managers, The Board keeps the services of the Manager, Investment Manager and This risk remains stable. The Portfolio Managers are supported by significant
could affect the performance of the Company. third-party service providers under continual review. The Board obtains resource within the Investment Manager.
assurances from the Investment Manager that the team is suitably resourced,
and appropriately remunerated and incentivised in its role. The Board also
considers the succession plan for the portfolio management team on an annual
basis.
Operational Disruption to, or failure of, the Manager's accounting, dealing or payments Details of how the Board monitors the services provided by the Manager and its To date, the Manager's operations and controls have proven robust. The Company
systems or the depositary's or custodian's could prevent accurate reporting associates and the key elements designed to provide effective internal control has not been impacted by any operational issues.
and monitoring of the Company's financial position. The risk of fraud or other are included within the Risk Management and Internal Control section of the
control failures within the Manager or other service providers could result in Corporate Governance report in the full Annual Report. The Audit Committee
losses to the Company. receives independently audited reports on the Manager's, the Investment
Manager's and other service providers' internal controls, as well as regular
reporting from the Manager's Compliance function.
The Company's management agreement obliges the Manager to report on the
detection of fraud relating to the Company's investments and the Company is
afforded protection through its various contracts with third party service
providers, of which one of the key protections is the Depositary's
indemnification for loss or misappropriation of the Company's assets held in
custody.
EMERGING RISKS
The Board has considered and kept under review emerging risks. The sole
emerging risk has been identified:
Artificial Intelligence ('AI')
While it might be deemed a great opportunity and force for good, there is an
increasing risk to business and society more widely from AI. Advances in
computing power means that AI has become a powerful tool that will impact a
huge range of areas and with a wide range of applications that include the
potential to disrupt and even to harm. In addition, the use of AI could be a
significant disrupter leading to added uncertainty in corporate valuations.
TRANSACTIONS WITH THE MANAGER AND RELATED PARTIES
Details of the management contract are set out in the Directors' Report in the
full Annual Report. The management fee payable to the Manager for the year was
£1,979,000 (2022: £2,222,000) of which £nil (2022: £nil) was outstanding
at the year end.
Included in administration expenses in note 6 in the full Annual Report are
safe custody fees amounting to £8,000 (2022: £8,000) payable to JPMorgan
Chase Bank N.A. of which £3,000 (2022: £2,000) 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 £nil
(2022: £31,000) of which £nil (2022: £nil) was outstanding at the year end.
The Company holds an investment in JPMorgan UK Small Cap Growth & Income
plc (formerly JPMorgan UK Smaller Companies Investment Trust plc) which is
also managed by the Investment Manager. At the year end this was valued at
£13.6 million (2022: £13.3 million) and represented 3.1% (2022: 3.0%) of the
Company's investment portfolio. During the year, the Company made £nil (2022:
£nil) purchases of this investment and sales with a total value of £501,000
(2022: £811,000). Dividend income amounting to £357,000 (2022: £334,000)
was receivable during the year, of which £nil (2022: £nil) 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 £7.7 million (2022:
£9.4 million). Interest amounting to £662,000 (2022: £325,000) was
receivable during the year, of which £nil (2022: £nil) was outstanding at
the year end.
At the year end, total cash of £611,000 (2022: £157,000) was held with
JPMorgan Chase Bank N.A. A net amount of interest of £32,000 (2022: £14,000)
was receivable by the Company during the year from JPMorgan Chase Bank N.A. of
which £nil (2022: £nil) was outstanding at the year end.
Handling charges on dealing transactions amounting to £4,000 (2022: £8,000)
were payable to JPMorgan Chase Bank N.A. during the year of which £1,000
(2022: £1,000) was outstanding at the year end.
Full details of Directors' remuneration and shareholdings can be found in the
full Annual Report.
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 prepared 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, directors must not approve the financial statements unless
they are satisfied that they give a true and fair view of the state of affairs
of the company and of the profit or loss of the company for that period. In
preparing the financial statements, the directors are required to:
• select suitable accounting policies and then apply them consistently;
• state whether applicable United Kingdom Accounting Standards,
comprising FRS 102 have been followed, subject to any material departures
disclosed and explained in the financial statements;
• make judgements and accounting estimates that are reasonable and
prudent; 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 are 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 Directors are also 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 and the
Directors' Remuneration Report comply with the Companies Act 2006.
The Directors are responsible for the maintenance and integrity of the
company's website. Legislation in the United Kingdom governing the preparation
and dissemination of financial statements may differ from legislation in other
jurisdictions.
The Financial Statements are published on the www.jpmclaverhouse.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 Financial Statements since they were
initially presented on the website. The financial statements are prepared in
accordance with UK legislation, which may differ from legislation in other
jurisdictions.
The Strategic Report and Directors' Report include 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 the
Company faces.
Under applicable law and regulations the Directors are also responsible for
preparing a Directors' Report and Directors' Remuneration Report that comply
with that law and those regulations.
Each of the directors, whose names and functions are listed in the full Annual
Report, confirm that to the best of their knowledge:
• the Company financial statements, which have been prepared in
accordance with United Kingdom Accounting Standards, comprising FRS 102, give
a true and fair view of the assets, liabilities, financial position and return
of the Company; and
• the Strategic Report and 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 Board confirms that it is satisfied that the Annual Report and Financial
Statements taken as a whole are fair, balanced and understandable and provide
the information necessary for shareholders to assess the performance, business
model and strategy of the Company.
For and on behalf of the Board
David Fletcher
Chairman
20(th) March 2024
STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31st December 2023
2023 2022
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Gains/(losses) on investments and derivatives held
at fair value through profit or loss - 12,726 12,726 - (53,403) (53,403)
Net foreign currency gains - 6 6 - 285 285
Income from investments 19,816 - 19,816 22,346 - 22,346
Interest receivable and similar income 694 - 694 339 - 339
Gross return/(loss) 20,510 12,732 33,242 22,685 (53,118) (30,433)
Management fee (693) (1,286) (1,979) (778) (1,444) (2,222)
Other administrative expenses (867) - (867) (716) - (716)
Net return/(loss) before finance costs and taxation 18,950 11,446 30,396 21,191 (54,562) (33,371)
Finance costs (757) (1,406) (2,163) (658) (1,222) (1,880)
Net return/(loss) before taxation 18,193 10,040 28,233 20,533 (55,784) (35,251)
Taxation (charge)/credit (17) - (17) 3 - 3
Net return/(loss) after taxation 18,176 10,040 28,216 20,536 (55,784) (35,248)
Return/(loss) per share 30.69p 16.95p 47.64p 34.27p (93.10)p (58.83)p
All revenue and capital items in the above statement derive from continuing
operations. No operations were acquired or discontinued in the year.
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 return/(loss) for the year and
also Total Comprehensive Income/(Expense).
STATEMENT OF CHANGES IN EQUITY
For the year ended 31st December 2023
Called up Share Capital Total
share premium redemption Capital Revenue Shareholders'
capital account reserve reserves(1) reserve(1) funds
£'000 £'000 £'000 £'000 £'000 £'000
At 31st December 2021 14,859 171,863 6,680 250,060 21,560 465,022
Issue of ordinary shares 178 5,004 - - - 5,182
Net (loss)/return - - - (55,784) 20,536 (35,248)
Dividends paid in the year - - - - (19,156) (19,156)
At 31st December 2022 15,037 176,867 6,680 194,276 22,940 415,800
Repurchase of shares into Treasury - - - (15,728) - (15,728)
Net return - - - 10,040 18,176 28,216
Dividend paid in the year - - - - (20,491) (20,491)
At 31st December 2023 15,037 176,867 6,680 188,588 20,625 407,797
(1) These reserves form the distributable reserves of the Company and
may be used to fund distributions to investors.
STATEMENT OF FINANCIAL POSITION
At 31st December 2023
2023 2022
£'000 £'000
Non current assets
Investments held at fair value through profit or loss 439,131 445,552
Current assets
Debtors 1,105 1,098
Cash and cash equivalents 8,296 9,556
Cash held at broker 432 -
9,833 10,654
Current liabilities
Creditors: amounts falling due within one year (11,010) (10,406)
Derivative financial liabilities (157) -
Net current (liabilities)/assets (1,334) 248
Total assets less current liabilities 437,797 445,800
Non current liabilities
Creditors: amounts falling due after more than one year (30,000) (30,000)
Net assets 407,797 415,800
Capital and reserves
Called up share capital 15,037 15,037
Share premium account 176,867 176,867
Capital redemption reserve 6,680 6,680
Capital reserves 188,588 194,276
Revenue reserve 20,625 22,940
Total shareholders' funds 407,797 415,800
Net asset value per share 705.7p 691.3p
For the 2023 year end, the 'Fixed Assets' sub-heading was changed to
'Non-Current Assets' to align to the adapted format under FRS 102. This change
did not result in any measurement changes.
STATEMENT OF CASH FLOWS
For the year ended 31st December 2023
2023 2022(1)
£'000 £'000
Net return/(loss) before finance costs and taxation 30,396 (33,371)
Adjustment for:
Net (gains)/losses on investments held at fair value through profit or (12,726) 53,403
loss
Net foreign currency gains (6) (285)
Dividend income (19,816) (22,346)
Interest income (694) (339)
Realised gains on foreign exchange transactions 6 312
Increase in accrued income and other debtors (1) (1)
Increase in accrued expenses 211 18
Net cash outflow from operations before dividends and interest (2,630) (2,609)
Dividends received 19,804 22,677
Interest received 683 316
Overseas withholding tax recovered - 1
Net cash inflow from operating activities 17,857 20,385
Purchases of investments (109,200) (226,611)
Sales of investments 129,024 280,403
Settlement of future contracts (520) (504)
Transfer of margin cash (to)/from the broker (432) 4,969
Net cash inflow from investing activities 18,872 58,257
Dividends paid (20,491) (19,156)
Issue of ordinary shares - 5,182
Repurchase of shares into Treasury (15,484) -
Repayment of bank loan (20,000) (100,000)
Drawdown of bank loan 20,000 40,000
Interest paid (2,014) (1,971)
Net cash outflow from financing activities (37,989) (75,945)
(Decrease)/increase in cash and cash equivalents (1,260) 2,697
Cash and cash equivalents at start of year 9,556 6,886
Exchange movements - (27)
Cash and cash equivalents at end of year 8,296 9,556
Cash and cash equivalents consist of:
Cash and short term deposits 611 157
Cash held in JPMorgan Sterling Liquidity Fund 7,685 9,399
Total 8,296 9,556
(1) The presentation of the Statement of Cash Flow, as permitted under
FRS 102, has been changed so as to present the reconciliation of 'net
return/(loss) before finance costs and taxation' to 'net cash inflow from
operating activities' on the face of the Statement of Cash Flow. Previously,
this was shown by way of note. Interest paid has also been reclassified to
financing activities, previously shown under operating activities, as this
relates to bank loan and private placement loan notes. Other than changes in
the presentation of certain cash flow items, there is no change to the cash
flows as presented in previous periods.
Analysis of net debt
As at Other non-cash As at
31st December 2022 Cash flows charges 31st December 2023
£'000 £'000 £'000 £'000
Cash and cash equivalents
Cash 157 454 - 611
Cash held in JPMorgan Sterling Liquidity Fund 9,399 (1,714) - 7,685
9,556 (1,260) - 8,296
Borrowings
Debt due within one year (10,000) - - (10,000)
Debt due after one year
£30m 3.22% Private Placement loan (30,000) - - (30,000)
(40,000) - - (40,000)
Net Debt (30,444) (1,260) - (31,704)
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31st December 2023.
1. Accounting policies
The Company is a listed public limited company incorporated in England and
Wales. The registered office is detailed in the full Annual Report.
(a) Basis of accounting
The financial statements are prepared under historical cost convention,
modified to include fixed asset investments and derivatives at fair value, and
in accordance with the Companies Act 2006, United Kingdom Generally Accepted
Accounting Practice ('UK GAAP'), including FRS 102 'The Financial Reporting
Standard applicable in the UK and Republic of Ireland' and with the Statement
of Recommended Practice 'Financial Statements of Investment Trust Companies
and Venture Capital Trusts' (the 'SORP') issued by the Association of
Investment Companies in July 2022.
All of the Company's operations are of a continuing nature.
The financial statements have been prepared on a going concern basis. In
making their assessment, the Directors have reviewed income and expense
projections, the liquidly of the investment portfolio and considered the
impact of stressed conditions on the portfolio liquidity and income. In
addition, the Directors have also considered the measures in place with key
service providers, including the Manager, to maintain operational resilience.
The disclosures on going concern in the full 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 declared
2023 2022
£'000 £'000
Dividends paid
2022 fourth quarterly dividend of 10.5p (2021: 9.5p) paid in March 2023 6,308 5,665
First quarterly dividend of 8.0p (2022: 7.5p) paid in June 2023 4,775 4,497
Second quarterly dividend of 8.0p (2022: 7.5p) paid in September 2023 4,731 4,497
Third quarterly dividend of 8.0p (2022: 7.5p) paid in December 2023 4,677 4,497
Total dividends paid in the year 20,491 19,156
All dividends paid and declared in the financial year have been funded from
the Revenue Reserve.
The fourth quarterly dividend proposed in respect of the year ended 31st
December 2022 amounted to £6,315,000. However, the amount paid amounted to
£6,308,000 due to shares redeemed after the balance sheet date but prior to
the record date.
The fourth quarterly dividend has been declared and paid in respect of the
year ended 31st December 2023. This dividend will be reflected in the
financial statements for the year ending 31st December 2024.
(b) Dividends 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
£18,176,000 (2022: £20,536,000). Brought forward revenue reserves amounting
to £22,940,000 (2022: £21,560,000) have been partially utilised in order to
finance the dividend in respect of the year.
2023 2022
£'000 £'000
First quarterly dividend of 8.0p (2022: 7.5p) paid in June 2023 4,775 4,497
Second quarterly dividend of 8.0p (2022: 7.5p) paid in September 2023 4,731 4,497
Third quarterly dividend of 8.0p (2022: 7.5p) paid in December 2023 4,677 4,497
Fourth quarterly dividend of 10.5p (2022: 10.5p) paid in March 2024 6,067 6,315
Total dividend declared in respect of the year of 34.5p (2022: 33.0p) 20,250 19,806
The revenue reserve after payment of the fourth dividend will amount to
£14,558,000 (2022: £16,625,000).
3. Return/(loss) per share
2023 2022
£'000 £'000
Revenue return 18,176 20,536
Capital return/(loss) 10,040 (55,784)
Total return/(loss) 28,216 (35,248)
Weighted average number of shares in issue during the year 59,232,911 59,917,311
Revenue return per share 30.69p 34.27p
Capital return/(loss) per share 16.95p (93.10)p
Total return/(loss) per share 47.64p (58.83)p
4. Net asset value per share
The net asset value per Ordinary share and the net asset value attributable to
the Ordinary shares at the year end follow. These were calculated using
57,785,140 (2022: 60,145,653) Ordinary shares in issue at the year end
(excluding Treasury shares).
2023 2022
Net asset value attributable
Net asset value attributable
£'000 pence £'000 pence
Net asset value - debt at par 407,797 705.7 415,800 691.3
Add: amortised cost of £30 million 3.22% private
placement loan March 2045 30,000 51.9 30,000 49.9
Less: fair value of £30 million 3.22% private
placement loan March 2045 (23,608) (40.8) (23,466) (39.0)
Net asset value - debt at fair value 414,189 716.8 422,334 702.2
5. Non-statutory accounts
The financial information set out above does not constitute the Company's
statutory accounts for the year ended 31 December 2023 but is derived from
those accounts. Statutory accounts for the year ended 31 December 2023 will be
delivered to the Registrar of Companies in due course. The Auditors have
reported on those accounts; their report was (i) unqualified, (ii) did not
include a reference to any matters to which the Auditors drew attention by way
of emphasis without qualifying their report and (iii) did not contain a
statement under Section 498 (2) or (3) of the Companies Act 2006. The text of
the Auditors' report can be found in the Company's full Annual Report and
Accounts on the Company's website at www.jpmclaverhouse.co.uk
(http://www.jpmclaverhouse.co.uk) .
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
21st March 2024
For further information, please contact:
Emma Lamb
For and on behalf of
JPMorgan Funds Limited
0800 20 40 20
ENDS
A copy of the Annual Report will shortly be submitted to the National Storage
Mechanism and will be available for inspection at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism.
The Annual Report will shortly be available on the Company's website at
www.jpmclaverhouse.co.uk (http://www.jpmclaverhouse.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
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