JPMorgan Euro Discov - Final Results
19/06/2025 07:00
RNS Number : 4766N
JPMorgan European Discovery Trust
19 June 2025
LONDON STOCK EXCHANGE ANNOUNCEMENT
JPMORGAN EUROPEAN DISCOVERY TRUST PLC
(the 'Company')
FINAL RESULTS FOR THE YEAR ENDED 31st MARCH 2025
Legal Entity Identifier: 54930049CEWDI46Y3U28
Information disclosed in accordance with the DTR 4.1.3
HIGHLIGHTS
• NAV total return of +2.9% compared with +1.3% for the MSCI Europe (ex UK) Small Cap Net Total Return Index (the 'Benchmark'). Share price return of +7.0%.
• For three years cumulative ended 31st March 2025, NAV total return of +5.6% compared with +3.8% for the Benchmark. Share price return of +15.6%.
• For five years cumulative ended 31st March 2025, NAV total return of +76.0% compared with +70.2% for the Benchmark. Share price return of +114.1%.
• For ten years cumulative ended 31st March 2025, NAV total return of +126.7% compared with +117.7% for the Benchmark. Share price return of +147.1%.
• Revenue return per share of 12.36p as at 31st March 2025 compared with 12.04 as at 31st March 2024 (+2.7%).
• The discount to NAV narrowed from 10.6% as at end March 2024 to 7.3% as at end March 2025, with the average discount over the period of 9.7%. As at 16th June 2025, the discount was 7.7%.
• During the year, the Company repurchased 14,660,188 shares at an average discount of 9.8%. A further 16,347,505 shares have been re-purchased since the period end.
The Chairman of the Company, Marc van Gelder, commented:
"I am happy to report that this year's outperformance has enhanced the Company's already robust long-term performance track record. The Company has made absolute gains and outperformed the market over the three, five and ten year periods ending 31st March 2025.
While recent geopolitical developments are certainly unsettling, they are likely to bring positive long-term benefits for the sector. Smaller companies are relatively insulated from the adverse impact of US tariffs benefiting from their significant regional market exposure. Increased government spending on defence and infrastructure across EU and other continental European nations should also benefit small and mid-cap companies.
The Portfolio Managers' have positioned the portfolio to capitalise on recent positive developments by focusing on companies with strong growth prospects and some immunity from the volatility generated by macroeconomic and geopolitical developments."
Portfolio Managers, Jon Ingram, Jack Featherby, Jules Bloch, commented:
"This year, our team has successfully navigated a turbulent macroeconomic environment, demonstrating resilience and expertise. European smaller companies offer a rich landscape for outstanding investment opportunities. Our skilled team is dedicated to discovering these future leaders, which we affectionately term hidden gems."
"European small caps are presenting a unique opportunity, trading at a notable discount relative to other asset classes while offering robust growth potential. This gap strengthens our confidence in the future of this asset class, especially as Europe's macroeconomic outlook begins to brighten. By seizing these undervalued prospects, we are poised to deliver significant returns and foster enduring success for our shareholders."
CHAIRMAN'S STATEMENT
Dear Shareholder,
I am pleased to present the Annual Report for the year ended 31st March 2025 and to report that our Company has:
• outperformed its benchmark over the year, achieving a total return on net assets of +2.9%, against the MSCI Europe (ex UK) Small Cap Index return of +1.3%;
• outperformed the market over the three, five and ten year periods ending 31st March 2025;
• record revenue return for the year of 12.36p, an increase of +2.7%.
Investment Performance
The market environment remained supportive over the past year. An easing in inflation pressures and a gradual reduction in interest rates combined with rising wages, lifted consumer spending across the region leading to increased investment. On the political front, developments over the past year have been dramatic and historically significant. The new US administration's aggressive tariffs and other policy pronouncements threaten to upend the post-World War II economic and political order. Consequently, European countries have been forced to reassess their relationship with the US and in particular, commit to higher defence spending. As an example, the new German government elected in February 2025 has promised a major increase in domestic defence and infrastructure investment.
Most major equity markets saw sharp declines in early 2025 due to concerns that higher US tariffs would slow global growth, raise inflation and delay or curtail investment plans. However, since the beginning of 2025, European small and mid-cap companies have fared better than most market sectors, including European large caps. This is supported by the fact that they generate much of their revenue from domestic sales and are thus relatively insulated from the impact of a global trade war. Investors are also clearly mindful that small cap and mid-cap companies will benefit from increased spending on defence and infrastructure.
For the financial year ended 31st March 2025 the MSCI Europe (ex UK) Small Cap Index returned +1.3%. Our Company outperformed its benchmark over the year, achieving a total return on net assets of +2.9%, while the total return on share price was +7.0%. This led to a significant narrowing of the discount at which the Company's shares trade relative to net asset value (NAV) from 10.6% to 7.3% over the course of the year.
While the past year's performance has been pleasing, the Company adopts a long-term investment strategy. Therefore, it is important to also consider the performance over a longer timeframe. I am happy to report that this year's outperformance has enhanced the Company's already robust long-term performance track record. The Company has made absolute gains and outperformed the market over the three, five and ten year periods ending March 2025. Significantly, over ten years making annualised returns of +8.5% on an NAV basis versus the annualised benchmark return of +8.1%.
Portfolio Enhancements
During the past year, the Portfolio Managers implemented some important enhancements to their process and risk management. Whilst the Company's investment strategy continues to seek to identify and invest early in high-quality companies when they are relatively unknown and undervalued, the Portfolio Managers noted in their 2024 Half Year Report that this strategy works best when markets are trending higher but tends to struggle during periods of high volatility caused by global crises and other sources of macro uncertainty. However, historically, once these periods of stress end, portfolio performance has bounced back strongly.
The changes made by the Portfolio Managers during the second half of FY25 are intended to minimise downside risk during periods of volatility and capture upside risk when volatility reduces. So far, these changes have had a positive impact on performance. All the gains made by the Company over the past year were made in the last six months of the financial year. During this period, the NAV rose +3.4%, against the benchmark return of +0.3%. The Portfolio Managers' report on pages 16 to 24 of the Annual Report provides further detail on this positive turnaround in performance, along with commentary on portfolio positioning and the investment outlook.
Gearing
Gearing can be a differentiator for an investment trust. The Board believes that it can be beneficial to performance and it sets the overall strategic gearing policy and guidelines which are reviewed at each Board meeting. Borrowings during the year consisted of a EUR125m revolving credit facility, which was EUR70m drawn down at year end. During the year gearing varied between 9.6% geared and 10.3% cash as a result of the Tender Offer. At the end of the financial year, gearing stood at 5.2%.
Revenue and Dividends
The Board's dividend policy is to pay out the majority of revenue available each year to its shareholders. This is set against the Company's objective of maximising capital growth, therefore the Portfolio Managers are not constrained to deliver income in any one financial year.
On 5th February 2025, an interim dividend of 3.0 pence per share was paid, which was an increase from the previous year's interim dividend of 2.5 pence. This increase reflects the higher income that the Company has received during the first six months of the financial year compared to the previous year.
Considering the income received during the financial year, the Company's revenue reserves, and pending shareholder approval at the upcoming Annual General Meeting (AGM), the Directors have declared a final dividend of 10.0 pence per share. This final dividend together with the interim dividend paid, is higher than the revenue return per share of 12.4 pence earned during the financial year ending 31st March 2025.
This will take the total dividend for the year to 13.0 pence, compared to a total dividend of 10.5 pence for the previous year. The final dividend will be paid on 4th August 2025, to shareholders registered at the close of business on 4th July 2025, with the ex-dividend date being 3rd July 2025. Following this dividend payment, the Company's revenue reserves will total £12.3 million, compared to £9.0 million as at 31st March 2024.
The dividend level is influenced by the share buybacks conducted since the year-end while allowing the Company to fulfill the distribution requirement of section 1158 of the Corporation Tax Act 2010 and maintain its investment trust status.
Discount Management and Share Repurchases
The Company's share price discount relative to net asset value narrowed during the Company's financial year, from 10.6% as at end March 2024 to 7.3% at end March 2025. The average discount over the period was 9.7% and as at 16th June 2025, the discount was 7.7%.
The Board monitors the level of the discount carefully. When appropriate, it uses the ability to repurchase shares to minimise the short-term volatility and the absolute level of the discount. During the year, the Company repurchased 14,660,188 shares at an average discount of 9.8%. A further 16,347,505 shares have been re-purchased since the period end.
As set out in the circular to shareholders dated 28th April 2025, the Board and the Investment Manager anticipated that, in the light of recent buy-back activity, the Company's authority to repurchase Ordinary Shares granted at the 2024 Annual General Meeting would likely be fully utilised before it could be refreshed at the Company's Annual General Meeting in July 2025. In order to ensure that the Company could continue to operate its discount management policy, on 16th May 2025, shareholders approved the early renewal of the Company's authority - to effectively repurchase up to 14.99% of its issued share capital (such authority to expire at the conclusion of the 2025 Annual General Meeting). Subsequent to this renewal, the Company has continued to use this buy-back authority.
Management Fee and Manager Evaluation
Following the Board's discussions with the Manager during the year an agreement was reached to reduce the investment management fee. With effect from 1st April 2025, the fee is now charged on a tiered basis on the Company's net assets at an annual rate of 0.70% on the first £300 million and 0.65% of net assets above that amount, compared to the previous flat fee of 0.75%.
During the year the Management Engagement Committee conducted the annual Board and Manager review facilitated by an independent board evaluation firm. The review of the Manager encompassed investment management, company secretarial, administrative and marketing services provided. The review took account of the Manager's investment performance record, management processes, investment style, resources committed and risk controls. The Board concurred with the Committee's recommendation that the continued appointment of the Manager was in the best interests of shareholders.
The Board
The Board continues to look ahead to manage its succession planning. In the normal course, having served for nine years I would step down from the Board at the forthcoming AGM. However, the Board is mindful of the changes over the last 18 months, in particular the investment management team and the appointment of two new Directors during the period. In order to ensure ongoing stability and continuity, the Board, in consultation with shareholders, believed that it was in the Company's best interests that I should extend my term to the AGM in 2026. The Board has commenced the recruitment process for a new Non-Executive Director.
Environmental, Social and Governance ('ESG')
The Board shares the Investment Manager's view of the significance of financially material environmental, social and governance ('ESG') factors when making long term investment decisions. The Portfolio Managers regularly discuss financially material ESG issues with the management teams of potential and current investee companies. Further information on the Manager's ESG process and engagement is set out in the ESG Report on pages 35 to 37 of the Annual Report.
Shareholder Engagement
The Board values regular interactions with a cross section of shareholders as they are very helpful in assisting with the management of the Company's affairs. The Board members seek opportunities to have such meetings and welcome approaches from shareholders at any time.
Over the course of the year, we have engaged with several of the Company's largest shareholders to listen to their perspectives. The Board values the feedback it has received and insights it has gained through this engagement process. We remain committed, as ever, to continued engagement over the coming year. I would like to take this opportunity to thank shareholders for their time and ongoing support.
With the Company's improved performance and positive outlook for the sector, a sub-committee of the Board has been working closely with the Manager's sales and marketing teams to raise the profile of the Company to attract more retail investors and to communicate the appeal of the European small and mid-cap sector.
Annual General Meeting
The Company's Annual General Meeting will be held on Wednesday, 23rd July 2025 at 12.30 p.m. at 60 Victoria Embankment, London EC4Y 0JP.
The Portfolio Managers will present to shareholders, reviewing the past year and commenting on the outlook for the current year. The meeting will be followed by lunch to provide shareholders the opportunity to meet the Directors and the Manager's representatives. My fellow Directors and I look forward to seeing as many shareholders as possible at the AGM.
For shareholders wishing to follow the AGM proceedings but choosing not to attend, we will be able to welcome you through our conferencing software. Details on how to register together with access details will shortly be available on the Company's website: www.jpmorganeuropeandiscovery.co.uk, or by contacting the Company Secretary at jpmam.investment.trusts@jpmorgan.com
As is normal practice, all voting on the resolutions will be conducted by a poll. For technical reasons, shareholders viewing the meeting via conferencing software will not be able to vote on the poll. We therefore encourage all shareholders who cannot attend in person, to exercise their votes in advance of the meeting by completing and submitting their proxy form.
If you have any detailed or technical questions, it would be helpful if you could raise them in advance with the Company Secretary at 60 Victoria Embankment, London EC4Y 0JP or via the 'Ask a Question' link on the Company's website.
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.
Stay Informed
The Company delivers email updates with regular news and views, as well as the latest performance. If you have not already signed up to receive these communications and you wish to do so, you can opt in via https://web.gim.jpmorgan.com/emea_investment_trust_subscription/welcome?targetFund=JEDT or by scanning the QR code provided in the Annual Report.
Outlook
The outlook for European small and mid-caps and our Company has brightened considerably since my last report.
The regional economy is strengthening, supported by declining interest rates. At the same time while recent geopolitical developments are certainly unsettling, they are likely to bring positive long-term benefits for the sector. Smaller companies are relatively insulated from the adverse impact of US tariffs benefiting from their significant regional market exposure. Increased government spending on defence and infrastructure across EU and other continental European nations should also benefit small and mid-cap companies.
In addition, the increasingly rapid spread of artificial intelligence (AI) is likely to be particularly advantageous for small and mid-cap companies. By their very nature, such businesses tend to be innovative and nimble. These characteristics suggest they will lead the way in their adoption of AI tools and will thus be amongst the first to realise related productivity gains and cost savings.
Finally, valuations in this part of the market remain very attractive in relative and absolute terms versus European large caps, the US and other global markets. All the favourable factors are aligned in support of small and mid-caps which suggest that the sector's long overdue rebound cannot be far off.
The Portfolio Managers' have positioned the portfolio to capitalise on recent positive developments by focusing on companies with strong growth prospects and some immunity from the volatility generated by macroeconomic and geopolitical developments. So I look forward with some confidence of reporting on the continuation of our Company's long track record of strong gains and outperformance over the coming months.
Marc van Gelder
Chairman 18th June 2025
INVESTMENT MANAGER'S REPORT
Review
The financial year ending 31st March 2025 was relatively stable compared to the turbulent years we have recently experienced. Notable events in the past few years included a mini financial crisis following the bankruptcies of Silicon Valley Bank (SVB) and Credit Suisse, an inflation shock following post-COVID supply chain disruptions, and an energy crisis spurred by Russia's invasion of Ukraine. In contrast, the 2024-25 financial year passed quite smoothly, with gradual declines in European energy prices and CPI expectations, and a resultant steady easing of policy rates by central banks. At the same time, there has been a growing realisation of the potential of artificial intelligence (AI) which could prove to be a once in a generation event for investors.
Where there was volatility, it was mainly driven by politics, and this impacted performance, both positively and negatively. Over the summer of 2024 the Trust's performance was impacted by the French parliamentary elections, due to our French overweight. Conversely the German elections at the start of 2025 brought with them hopes of fiscal stimulus, which benefited performance due to our positive positioning towards a resurgent and recovering Europe.
However, the most significant political event over the period happened outside Europe - the US presidential election - which saw Donald Trump decisively re-elected, leading to a surge in US markets amid shouts of US exceptionalism. The markets' initial enthusiastic response was fired by the view that the new administration would be good for markets and business. There was also optimism about the prospect of a peace dividend from the resolution of conflicts in Ukraine and the Middle East, which President Trump promised to end quickly.
What a difference a few months can make. The narrative of US exceptionalism has shifted dramatically with speculation that the US's post-war dominance of the international political and economic landscape is coming to an end. President Trump's 'America First' policies are beginning to destabilise the post-World War II economic order by prioritising domestic manufacturing over a global trade system based on comparative advantage. Following the end of the Trust's financial year, the administration launched an unpredictable 'on-off' approach to tariff policy that has generated huge uncertainty among consumers and investors in the US and around the world.
The US's relationship with its European allies has also shifted dramatically. US Vice President Vance's speech at the Munich Security Conference harshly criticised NATO and European leaders and is being widely interpreted as a turning point for post-war trans-Atlantic relations. The speech has sparked calls for European rearmament and increased spending by EU governments.
We believe these political shifts are significant for the Trust. In our view, the impact on the European Small Cap asset class could be profoundly positive over the long-term. We delve into this in more length in this report's Outlook section, but in summary, European domestically-focused companies - particularly European Small Caps with substantial domestic revenue exposure - are relatively insulated from a global trade war and poised to benefit from greater investment in European infrastructure and increased defence spending. In addition, smaller companies stand to gain from initiatives like former Italian Prime Minister and ECB governor, Mario Draghi's report on reducing European red tape to enhance competitiveness (see further discussion below), and from a number of other positive developments we foresee, including, falling interest rates (given smaller businesses' sensitivity to floating rate debt), improving consumer confidence driven by rising wage growth, and the efficiency gains offered by AI.
Indeed, if we examine the performance of European Small Caps since the November 2024 US presidential election, it is clear they have already begun to factor in these favourable influences. The sector has demonstrated strong relative performance compared to European large caps, especially since the German elections. Since the US's announcement of its new tariff regime, European Small Caps have continued to outperform (and they recovered more swiftly from the post-tariff announcement sell-off).
Table 1: Key European macroeconomic indicators
| Key EU macro indicators | March 23 | March 24 | March 25 |
| ECB main refinancing rate | 3.50% | 4.50% | 2.65% |
| EU Inflation (Harmonised index of | |||
| consumer prices, yoy) | 8.30% | 2.60% | 2.50% |
| EU GDP Growth (real, yoy) | 1.20% | 0.60% | 1.40% |
| PMIs | 53.6 | 50.3 | 50.9 |
| Manufacturing PMIs | 47.3 | 46.3 | 48.6 |
| Services PMIs | 55.0 | 51.5 | 51.0 |
| % | % | |
| Contributions to total returns | ||
| Benchmark return | 1.3 | |
| Asset allocation | (0.3) | |
| Stock selection | 0.9 | |
| Gearing/cash effect | 0.8 | |
| Currency effect | (0.3) | |
| Investment Managers' added contribution | 1.1 | |
| Portfolio return | 2.4 | |
| Management fees and other expenses | (0.9) | |
| Shares repurchased | 1.1 | |
| Tender offer | 0.3 | |
| Other effects | 0.5 | |
| Return on net assetsA | 2.9 | |
| Return on share priceA | 7.0 |
| Portfolio | Benchmark | Attribution | |||||
| (%) | (%) | (%) | |||||
| Average | Average | ||||||
| Sector | Weight | Return | Weight | Selection | Allocation | Total | |
| Consumer Discretionary | 11.59 | 4.59 | 8.53 | 1.25 | -0.34 | 0.91 | |
| Consumer Staples | 3.75 | -2.37 | 4.77 | 0.34 | 0.10 | 0.44 | |
| Communication Services | 7.84 | 7.88 | 4.57 | 0.41 | 0.02 | 0.43 | |
| Real Estate | 7.00 | -0.72 | 8.02 | -0.12 | -0.15 | -0.27 | |
| Materials | 5.57 | -11.97 | 7.95 | -0.65 | 0.21 | -0.44 | |
| Industrials | 31.09 | -2.27 | 25.98 | -0.67 | 0.03 | -0.64 | |
| Account | Benchmark | Attribution | |||
| (%) | (%) | (%) | |||
| Average | Average | Weight | Total | ||
| Company | Weight | Return | Weight | Difference | Effect |
| Top 3 Contributors | |||||
| Bilfinger | 2.72 | 54.29 | 0.17 | 2.55 | 1.31 |
| Unipol | 2.14 | 91.64 | 0.30 | 1.84 | 1.12 |
| Lottomatica | 1.75 | 68.40 | 0.18 | 1.57 | 1.03 |
| Bottom 3 Contributors | |||||
| Ipsos | 1.76 | -36.12 | 0.24 | 1.52 | -0.68 |
| Fugro | 1.88 | -37.54 | 0.27 | 1.61 | -0.68 |
| BFF Bank | 1.31 | -32.55 | 0.20 | 1.11 | -0.71 |
| MSCI Europe | ||||
| Company | (ex UK) Small Cap | MSCI Europe | MSCI World | |
| Europe (ex UK) | 59.6% | 58.5% | 31.0% | 11.9% |
| United Kingdom | 4.8% | 4.3% | 8.7% | 3.3% |
| North America | 10.7% | 12.9% | 26.0% | 52.6% |
| Japan | 0.9% | 1.2% | 2.4% | 4.6% |
| Asia (ex Japan) | 2.1% | 1.5% | 3.1% | 4.2% |
| Emerging Markets | 21.8% | 21.7% | 28.8% | 23.3% |
| Sales | Earnings | |||||
| growth | growth | P/E | ||||
| CAGR | CAGR | Cyclically | Price-to- | Price-to- | ||
| '02-24 | '02-24 | P/E | Adjusted | sales | book | |
| MSCI Europe (ex UK) SC | 6.3% | 8.7% | 15.8x | 15.6x | 0.9x | 1.5x |
| MSCI Europe (ex UK) | 2.6% | 5.4% | 16.0x | 22.1x | 1.7x | 2.2x |
| FTSE 100 | 3.4% | 4.5% | 12.7x | 18.7x | 1.4x | 1.9x |
| FTSE 250 | 5.0% | 6.7% | 15.1x | 12.6x | 0.9x | 1.4x |
| S&P 500 | 6.2% | 8.3% | 24.0x | 31.8x | 3.0x | 4.8x |
| Risk Description | Mitigation and Management |
| Investment Performance and Strategy Performance of the Company's investment portfolio is fundamental to the success of the company. An inappropriate investment strategy, or poor implementation of the strategy, for example relating to concentration of investments, asset allocation, the level of gearing or the degree of portfolio risk. | Ongoing performance measurement of the portfolio computed independently of the investment managers. This is shared within Investment Managers teams for ongoing oversight as well as to the Board. The Board reviews the overall strategy and structure of the Company and reports of comparison of the performance against benchmark, peer group and share activity. The Board holds a separate meeting devoted to strategy each year which includes consideration of whether the Company's objectives and structures are appropriate for the long-term interests of shareholders. Regular reports prepared by the Manager are received by the Board on stock selection, asset allocation, gearing, hedging and costs of running the Company and these are reviewed at each Board meeting. |
| Discount/Premium Control Share price premium volatility and deep discount to net asset value per share leads to a sense of uncertainty reducing shareholder confidence. Potentially triggering shareholder intervention. | The Board continuously monitors the level of the discount. Where deemed it prudent, seeks to address the imbalances in the supply of and demand for the Company's shares through share repurchases. |
| Geopolitical Market instability and declining investment opportunities from escalation of geopolitical conflicts, such as in Ukraine and in the Middle East. Along with the implications of trade and tariff policies emanating from the new US Administration. | The Company monitors global developments with the Manager and external experts on an ongoing basis. The Board can, with shareholder approval, amend the investment policy and objectives of the Company to mitigate the risks arising from geopolitical instability. |
| Market and Currency Uncertainty about the future prices and liquidity of the Company's investments arising from economic, social, fiscal, climate, inflationary and regulatory changes. This covers the impact of holding investments in the face of negative market movements. The company has an inherent risk exposure to the Euro/Sterling exchange rate. The majority of the Company's assets, liabilities and income are denominated in Euros, rather than in Sterling which is the Company's functional currency and in which it reports performance. | The Board manages these risks by diversification of investments and monitoring compliance with investment guidelines and policies with the Investment Manager. The Board includes an assessment of these risk factors at meetings and has placed investment restrictions and guidelines to limit these risks. The Board also reviews the level of liquidity in the portfolio. The Company borrows in Euros in order to hedge the currency risk in respect of the geared portion of the portfolio. The Company does not hedge the foreign currency exposure of the remainder of the portfolio. |
| Loss of Key Personnel Loss of one or more of the investment management team, particularly key individuals. | The Manager ensures appropriate performance reviews and benchmarked incentivisation and compensation. In addition, ongoing succession planning through a team-based approach. The Board also takes a keen interest in getting to know the individuals through attendance at Board meetings and their participation at the off-site Strategy meetings. |
| Shareholder Relations Failure to communicate effectively and regularly and appropriately with the different shareholder constituencies. | The Manager has a programme of visiting major institutional holders and providing presentations via various platforms to communicate more widely with its investors. Extensive range of investor information and nation-wide presentations are done by the Sales teams and feedback via brokers is reviewed for improvements. In addition, the Board arranges regular meetings with major institutional holders and responds to questions and matters raised at AGMs or in the interim by shareholders. |
| Operational and Cyber Crime In common with most investment trusts the Board delegates the operation of the business to third parties, the principal delegate being the Manager. Disruption to, failure of, or fraud in the Manager's accounting, dealing or payments systems or at its service providers (Custodian, Depositary or Registrar) preventing timely implementation of investment decisions, and potentially shortfalls in the accuracy of reporting and monitoring of the Company's financial position. Cyber-attack impacting business continuity, breaches of information security and integrity of data. | The Audit Committee receives independently audited reports on the Managers and other service providers' internal controls, as well as a report 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 suppliers, of which one of the key protections is the Depositary's indemnification for loss or misappropriation of the Company's assets held in custody. Details of how the Board monitors the services provided by JPMF and its associates and the key elements designed to provide effective risk management and internal control are included within the Risk Management and Internal Control section of the Corporate Governance Statement on page 57 of the Annual Report. The Board is kept up to date with the Manager's cyber security defences and its cyber security programme. The information technology controls around the physical security of data centres, security of its networks and trading applications are tested and reported on every six months against industry standards. |
| Accounting, Legal and Regulatory Failure to comply with existing and emerging accounting, fiscal regulatory rules. The Company operates in an environment with significant regulation including the UK Listing Rules, The UK Companies Act, the Corporation Taxes Act, Market Abuse Regulation, Disclosure Guidance and Transparency Regulations and the Alternative Investment Fund Managers Directive (AIFMD). An example is the breach of Section 1158 which would lead to a loss of investment trust status and, as a consequence, gains within the Company's portfolio would be subject to capital gains tax. | The Board relies on the services of its Company Secretary, the Manager (JPMF) and its service providers and professional advisers to ensure compliance. Relying on relevant processes reviewed on a regular basis including by Internal Audit and Risk & Operational audits together with regular consultation with External Auditors and meetings of the Audit Committee. Specifically, the Section 1158 compliance is continually monitored by the Manager and the results reported to the Board each month. |
| Artificial Intelligence (AI) AI has become a powerful tool that will impact a huge range of areas. It could be a significant driver for new business as well as a disrupter to current business models and processes leading to emerging uncertainty in corporate valuations. There is also an increased potential risk from cyber related crime. | The Manager's investment process integrates financially material considerations of the impact of AI when taking investment decisions. The Board works with the Manager to monitor the developments concerning AI and its potential impact on the portfolio, our service providers and the wider market. |
| Climate Change Climate change has an increasingly significant impact on the business models, sustainability and even viability of individual companies, sectors and asset classes, impacting investment performance and valuations in the short and longer term. | The Manager's investment process integrates financially material considerations of environmental, social and governance (ESG) factors when taking investment decisions. This includes considering the approach investee companies take to recognising and mitigating climate change risks. This is outlined in Investment Manager's Report. The Board reviews ESG reports from the Manager on the way ESG considerations are integrated into the investment decision making. It also considers, where relevant, the direct impact on climate change from the nature of operations of the Manager and other service providers. At the level of the Company, as extreme weather events become more common, the resiliency, business continuity planning and location strategies of the Company's service providers will come under greater scrutiny. |
| 2025 | 2024 | |||||
| Revenue | Capital | Total | Revenue | Capital | Total | |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
| (Losses)/gains on investments and derivatives | ||||||
| held at fair value through profit or loss | - | (8,236) | (8,236) | - | 25,759 | 25,759 |
| Foreign exchange losses on JPMorgan EUR | ||||||
| Liquidity Fund | - | (1,490) | (1,490) | - | (172) | (172) |
| Net foreign currency gains | - | 2,367 | 2,367 | - | 2,225 | 2,225 |
| Income from investments | 21,033 | 4,956 | 25,989 | 23,050 | - | 23,050 |
| Interest receivable and similar income | 1,620 | - | 1,620 | 932 | - | 932 |
| Gross return/(loss) | 22,653 | (2,403) | 20,250 | 23,982 | 27,812 | 51,794 |
| Management fee | (1,510) | (3,524) | (5,034) | (1,732) | (4,041) | (5,773) |
| Other administrative expenses | (900) | - | (900) | (860) | - | (860) |
| Net return/(loss) before finance costs and taxation | 20,243 | (5,927) | 14,316 | 21,390 | 23,771 | 45,161 |
| Finance costs | (1,162) | (2,721) | (3,883) | (1,227) | (2,861) | (4,088) |
| Net return/(loss) before taxation | 19,081 | (8,648) | 10,433 | 20,163 | 20,910 | 41,073 |
| Taxation | (3,189) | (701) | (3,890) | (1,493) | - | (1,493) |
| Net return/(loss) after taxation | 15,892 | (9,349) | 6,543 | 18,670 | 20,910 | 39,580 |
| Return/(loss) per share(note 3) | 12.36p | (7.27)p | 5.09p | 12.04p | 13.49p | 25.53p |
| Called up | Share | Capital | ||||
| share | premium | redemption | Capital | Revenue | ||
| capital | account | reserve | reserves1 | reserve1 | Total | |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
| At 31st March 2023 | 7,874 | 1,312 | 7,762 | 749,999 | 18,115 | 785,062 |
| Repurchase of shares into Treasury | - | - | - | (40,278) | - | (40,278) |
| Proceeds from unclaimed shares forfeited2 | - | - | - | 658 | - | 658 |
| Net return after taxation on ordinary shares | - | - | - | 20,910 | 18,670 | 39,580 |
| Dividends paid in the year (note 2) | - | - | - | - | (15,976) | (15,976) |
| At 31st March 2024 | 7,874 | 1,312 | 7,762 | 731,289 | 20,809 | 769,046 |
| Tender offer shares acquired and cancelled | (1,058) | - | 1,058 | (104,897) | - | (104,897) |
| Cost in relation to Tender offer | - | - | - | (421) | - | (421) |
| Repurchase of shares into Treasury | - | - | - | (69,126) | - | (69,126) |
| Net (loss)/return after taxation on ordinary shares | - | - | - | (9,349) | 15,892 | 6,543 |
| Dividends paid in the year (note 2) | - | - | - | - | (14,895) | (14,895) |
| At 31st March 2025 | 6,816 | 1,312 | 8,820 | 547,496 | 21,806 | 586,250 |
| 2025 | 20241 | |
| £'000 | £'000 | |
| Fixed assets | ||
| Investments held at fair value through profit or loss1 | 591,594 | 776,749 |
| Investments on loan held at fair value through profit or loss1 | 24,941 | 52,989 |
| Total investments held at fair value through profit or loss | 616,535 | 829,738 |
| Current assets | ||
| Debtors | 7,728 | 6,815 |
| Current asset investments1 | 23,039 | 7,242 |
| Cash at bank1 | 662 | 312 |
| 31,429 | 14,369 | |
| Creditors:amounts falling due within one year | (61,714) | (2,391) |
| Net current (liabilities)/assets | (30,285) | 11,978 |
| Total assets less current liabilities | 586,250 | 841,716 |
| Creditors:amounts falling due after more than one year | - | (72,670) |
| Net assets | 586,250 | 769,046 |
| Capital and reserves | ||
| Called up share capital | 6,816 | 7,874 |
| Share premium account | 1,312 | 1,312 |
| Capital redemption reserve | 8,820 | 7,762 |
| Capital reserves | 547,496 | 731,289 |
| Revenue reserve | 21,806 | 20,809 |
| Total shareholders' funds | 586,250 | 769,046 |
| Net asset value per share(note 4) | 524.0p | 520.7p |
| 2025 | 2024 | |
| £'000 | £'000 | |
| Cash flows from operating activities | ||
| Net return before finance costs and taxation | 14,316 | 45,161 |
| Adjustment for: | ||
| Net losses/(gains) on investments held at fair value through profit or loss | 8,236 | (25,759) |
| Foreign exchange losses on JPMorgan EUR Liquidity Fund | 1,490 | 172 |
| Net foreign currency gains | (2,367) | (2,225) |
| Dividend income | (25,989) | (23,050) |
| Interest income | (1,159) | (801) |
| Realised gain/(loss) on foreign exchange transactions | 451 | (486) |
| Realised foreign exchange losses on JPMorgan EUR Liquidity Fund | (1,483) | (267) |
| Increase in accrued income and other debtors | (1) | (37) |
| Increase/(decrease) in accrued expenses | 50 | (31) |
| Net cash outflow from operations before dividends, interest and taxation | (6,456) | (7,323) |
| Dividends received | 22,390 | 23,751 |
| Interest received | 1,212 | 748 |
| Overseas withholding tax recovered/(paid) | (252) | (2,881) |
| Net cash inflow from operating activities | 16,894 | 14,295 |
| Purchases of investments | (389,557) | (683,947) |
| Sales of investments | 594,797 | 723,852 |
| Net cash inflow from investing activities | 205,240 | 39,905 |
| Dividends paid | (14,895) | (15,976) |
| Tender offer shares acquired and cancelled | (104,897) | - |
| Repurchase of shares into Treasury | (69,319) | (39,592) |
| Cost in relation to Tender offer | (421) | - |
| Proceeds from unclaimed shares forfeited | - | 658 |
| Repayment of Bank loan | (33,562) | (34,447) |
| Drawdown of Bank loan | 21,377 | - |
| Interest paid | (3,881) | (4,770) |
| Net cash outflow from financing activities | (205,598) | (94,127) |
| Increase/(decrease) in cash and cash equivalents | 16,536 | (39,927) |
| Cash and cash equivalents at start of year | 7,160 | 47,000 |
| Exchange movements | 5 | 87 |
| Cash and cash equivalents at end of year | 23,701 | 7,160 |
| Cash and cash equivalents consist of: | ||
| Cash at bank | 662 | 312 |
| JPMorgan EUR Liquidity Fund | 23,039 | 7,242 |
| Cash at bank and current asset investments per the Statement of | ||
| Financial Position | 23,701 | 7,554 |
| Bank overdraft (included as part of current liabilities in note 13) | - | (394) |
| Total cash and cash equivalents | 23,701 | 7,160 |
| 2025 | 2024 | |||
| Pence | £'000 | Pence | £'000 | |
| Dividends paid | ||||
| Unclaimed dividends returned to the Company | - | - | - | (120) |
| Final dividend in respect of the prior year | 8.0 | 11,383 | 7.8 | 12,283 |
| Interim dividend | 3.0 | 3,512 | 2.5 | 3,813 |
| Total dividends paid in the year | 11.0 | 14,895 | 10.3 | 15,976 |
| Dividend proposed | ||||
| Final dividend | 10.0 | 9,5521 | 8.0 | 11,815 |
| 2025 | 2024 | |||
| Pence | £'000 | Pence | £'000 | |
| Interim dividend | 3.0 | 3,512 | 2.5 | 3,813 |
| Final dividend | 10.0 | 9,552 | 8.0 | 11,815 |
| Total | 13.0 | 13,064 | 10.5 | 15,628 |
| 2025 | 2024 | |
| £'000 | £'000 | |
| Revenue return | 15,892 | 18,670 |
| Capital (loss)/return | (9,349) | 20,910 |
| Total return | 6,543 | 39,580 |
| Weighted average number of shares in issue during the year | 128,544,579 | 155,063,487 |
| Revenue return per share | 12.36p | 12.04p |
| Capital (loss)/return per share | (7.27)p | 13.49p |
| Total return per share | 5.09p | 25.53p |
| 2025 | 2024 | |
| Net assets (£'000) | 586,250 | 769,046 |
| Number of shares in issue | 111,872,243 | 147,692,459 |
| Net asset value per share | 524.0p | 520.7p |
| As at | As at | |||
| 31st March 2024 | Cash flows | Exchange movements | 31st March 2025 | |
| £'000 | £'000 | £'000 | £'000 | |
| Cash at bank and current asset investments | ||||
| Cash at bank | 312 | 338 | 12 | 662 |
| Cash held in JPMorgan EUR Liquidity Fund | 7,242 | 15,804 | (7) | 23,039 |
| Bank overdraft | (394) | 394 | - | - |
| 7,160 | 16,536 | 5 | 23,701 | |
| Borrowings | ||||
| Bank Loan | (72,670) | 12,815 | 1,904 | (58,581) |
| Net debt | (65,510) | 28,721 | 1,909 | (34,880) |