JPMorgan UK Sml Cap - Half-year Report
22/03/2024 16:42
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RNS Number : 0317I JPMorgan UK Small Cap Grwth&Inc PLC 22 March 2024
LONDON STOCK EXCHANGE ANNOUNCEMENT
JPMORGAN UK SMALL CAP GROWTH & INCOME PLC
(FORMERLY JPMORGAN UK SMALLER COMPANIES INVESTMENT TRUST PLC)
UNAUDITED HALF YEAR RESULTS FOR THE SIX MONTHS ENDED
31ST JANUARY 2024
Legal Entity Identifier: 549300PXALXKUMU9JM18
Information disclosed in accordance with DTR 4.2.2
CHAIRMAN'S STATEMENT
Investment Performance and Overview
The Company has had an eventful six months, enjoying continued good
performance and the successful combination with JPMorgan Mid Cap Investment
Trust plc which was completed post the period end. The Board wishes to thank
all those involved for their considerable efforts, not least the Portfolio
Managers.
Despite continued market volatility, I am pleased to report that the Company's
total return on net assets (with net dividends reinvested) over the six months
to 31st January 2024 of +8.5% outperformed the benchmark, Numis Smaller
Companies plus AIM (excluding Investment Companies) Index, which returned
+1.0%. This strong outperformance relative to the benchmark index is explained
in the Investment Manager's Report which provides a detailed commentary on the
portfolio positioning and the current outlook for investing in the UK. The
return to shareholders for the reporting period was +8.2% which reflects a
marginal widening of the share price discount to net asset value from 10.7% at
the start of the financial year to 11.5% at the end of the half year.
Following the Company's successful combination with JPMorgan Mid Cap
Investment Trust plc ('JMF') ('the Transaction'), the unaudited net assets of
the enlarged Company total approximately £447.0 million as at 29th February
2024. Since the end of the reporting period, from 31st January 2024 to 20th
March 2024, the Company's total return on net assets was +2.8%, outperforming
the Company's benchmark index which fell by 0.8%. Over the same period, the
Company delivered a return to ordinary shareholders of +1.1% as the discount
widened.
Loan Facility and Gearing
During the reporting period, the Company continued to utilise its £50 million
revolving credit facility (with an option to draw a further £10 million) to
maintain a meaningful but modest level of gearing.
The Company has maintained a fairly constant level of gearing, with the Board
giving the Portfolio Managers flexibility to adjust the gearing tactically
within a range set by the Board of 10% net cash to 15% geared in normal
markets. During the reporting period, the Company's gearing ranged from 8.7%
to 11.9%, ending the half year at 9.9% as the Portfolio Managers took
advantage of perceived attractive valuations. Following the Transaction, on
29th February 2024 the Portfolio Managers increased the total borrowings drawn
to £50 million. A new secured £50 million 364 day loan facility was
effective from 14th March 2024 (with an increased accordion option of £40
million). As at 20th March 2024 the Company's gearing was 8.7%, with total
borrowings of £50 million.
Share Repurchases and Issuance
During the six months to 31st January 2024, the Company repurchased 150,000
shares into Treasury. The Company did not issue any shares. The Board's
objective remains to act in the best interests of Shareholders by using the
repurchase and allotment authorities to manage 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. As at the
end of the reporting period there were 79,611,410 shares in issue (including
1,709,741 shares held in Treasury).
Following the Transaction, the Company acquired approximately £192.8 million
of the net assets from JMF in consideration for the issue of 59,529,867 new
ordinary shares in the capital of the Company. Therefore, the Company's shares
in issue have increased to 139,141,277 (including 1,709,741 shares held in
Treasury).
Dividends
At the Company's Annual General Meeting ('AGM') in November 2023, Shareholders
approved a final dividend of 7.7p per share which was paid on 7th December
2023.
Since the end of the reporting period and in relation to the Transaction, an
interim dividend ('pre-completion dividend') of 3.6p per share was paid to
Shareholders of JPMorgan UK Smaller Companies Investment Trust plc on 27th
February 2024 (ex-dividend 1st February 2024).
As detailed in the Company's Circular, in May 2024, the Company will announce
an additional interim dividend equivalent to 2% of the unaudited NAV of the
enlarged Company as at the date of Admission (28th February 2024), which is
expected to be paid to Shareholders in July 2024.
Furthermore, the Company will introduce an enhanced dividend policy, targeting
a 4% yield on the NAV per annum, calculated on the basis of 4% of audited NAV
as at 31st July each year, being the end of the preceding financial year of
the Company. Under the enhanced dividend policy, the Company will move from
paying a final annual dividend to equal quarterly interim dividends, to be
announced in August, November, February and May and expected to be paid in
October, January, April and July each year.
Combination with JMF and change of name
Following the period end, the Company successfully completed the merger with
JPMorgan Mid Cap Investment Trust plc and was renamed JPMorgan UK Small Cap
Growth & Income plc. The transaction was well received by Shareholders and
the wider market, recognising the logic of creating a larger, more liquid
Investment Trust and creating a leading investment vehicle for UK smaller
companies. The Company's benchmark, the Numis Smaller Companies plus AIM
(excluding Investment Companies) Index, comprises the smallest 1,000 UK
companies by market cap, covering fledgling and AIM stocks as well as the
lower end of the FTSE 250 (ex Investment Trusts) Index thus providing exposure
to a diverse and wide range of fast growing, innovative companies that help
drive the UK economy. As a result, Shareholders will now benefit from a
reduction in costs, contributing to the good potential for capital growth, and
the new enhanced dividend policy, which will allow Shareholders to benefit
from an attractive yield. The transitioning of the portfolio went smoothly and
is now largely complete. Pleasingly, the portfolio continued to outperform the
benchmark during the transition despite the higher transaction costs caused by
the merger implementation.
Board Succession
Following the Transaction, three of the previous Directors of JMF, being Lisa
Gordon, Richard Gubbins and Hannah Philp, were appointed as non-executive
Directors of the Company. Therefore, the Board now consists of seven
Directors, comprising the four Directors from the existing Board and three
Directors from the board of JMF. Richard Gubbins will be retiring from the
Board at the Company's next AGM. As previously announced, I will also be
retiring from the Board following the next AGM after having served on the
Board from 2015 and as its Chairman since 2019. This will reduce the Board to
five Directors.
In accordance with the FCA's new policy on diversity, the Board currently
complies with the gender recommendation and is committed to increasing
diversity and inclusion over time.
Outlook
Equity markets enjoyed a welcome rally at the turn of the year though the
stellar returns came from the USA where the so called 'Magnificent 7' (AI
related stocks) accounted for the majority of the return. As a result,
investors in funds that tracked the S&P 500 did considerably better than
actively managed funds which would not typically be able to match the index
weight. This very narrow leadership harps back to the days of the 'nifty
fifty' and some stock valuations are arguably beginning to look extended.
In the UK, the market experience is the polar opposite. Smaller companies, and
the stock market in general, continue to be deeply out of favour with
investors. Whilst the attractive valuation is generally acknowledged,
investors are content with sitting on the sidelines awaiting a catalyst.
Indeed, the market is still experiencing net outflows. If the government is
serious in its stated intention to boost investment in UK plc and provide a
catalyst, it will have to do considerably more than the modest measures
announced in the budget and encourage greater investment from pension funds
whose considerable fire power could make a difference.
In the meantime, the Portfolio Managers are invested in a broad range of high
quality stocks which have the potential to deliver superior returns. The Board
believes that there is a strong case for long-term investment in UK smaller
and midcap companies. The valuations are attractive in absolute and relative
terms, there are diversification benefits, the outlook remains favourable
despite some near-term challenges and the Company provides access to
investments in a controlled risk environment that individual investors would
find difficult to replicate on their own.
Andrew Impey
Chairman
22nd March 2024
INVESTMENT MANAGER'S REPORT
Performance and Market Background
Geopolitical uncertainties continued to increase in the first half of the
financial year to 31st January 2024. In addition to the appalling war in
Ukraine, we must now add the recent atrocities in the Middle East, and rising
tension in that region. The US economy continued to power ahead, but the UK
did not manage to avoid a technical recession in the last two quarters of
2023; for technical, read mild, as during 2023 the country flatlined with GDP
growth of 0.1%. Interest rates remained unchanged at 5.25%, but inflation
reduced significantly, although it still remains uncomfortably above target.
This, plus the decline in energy prices and the increase in nominal wages,
provided some relief for the consumer, as did the ongoing resilience of the
employment market.
Against this backdrop, the Numis Smaller Companies plus AIM (excluding
Investment Companies) Index was almost flat overall at +1.0% for the six month
period. It should be noted that this hides a strong rally of over 13.1% in the
index from November to January, as inflation appeared to be coming under
control and the stockmarket began to focus on rate cuts. The Company strongly
outperformed during the period and produced a total return on net asset value
of +8.5%, while the share price total return was +8.2%.
Portfolio
Continuing the strong performance that benefitted the Company last year, the
two largest positive contributors over the half year were the sizeable
positions in Bank of Georgia (one of the two dominant banks in the
flourishing economy of Georgia) and Ashtead Technology (subsea rental
equipment into the oil and gas and renewables markets). Both companies
continued to grow significantly and produce strong results ahead of market
expectations. In addition, we benefitted from a number of other holdings
including Warpaint London (affordable cosmetics) and the buy-to-let mortgage
lender OSB (formerly OneSavings Bank), which rebounded strongly post its
disappointment in the summer. On the negative side there were two main
detractors, Watches of Switzerland and Alpha Group International. Fortunately
we had significantly reduced the former prior to its January profit warning,
and have subsequently exited. With regards to Alpha Group International, after
a very strong 2023 the shares have retrenched. We took some profits, but
retain a sizeable position in this long term growth story.
Over the period we have made certain changes to the portfolio. There have been
a number of new additions, as we continue to find exciting and undervalued
investment opportunities. These include Hostelworld (the leading online travel
agent for hostels), Keystone Law (an innovative law firm) and in the building
arena, the housebuilder MJ Gleeson and Volution, which supplies ventilation
products to the building industry. Over the period we also sold out of certain
holdings including H&T, Calnex and SDI on concerns over current trading.
Ergomed also left the portfolio post its bid.
At the time of writing this report, the merger with JPMorgan Mid Cap
Investment Trust has now taken place. In addition to the holdings that were
owned in both portfolios, we transferred eight new names into the combined
vehicle, as well as the proceeds from the disposals we made in the Mid Cap
Investment Trust prior to the merger. New names include Bellway (a leading UK
housebuilder), Shaftesbury Capital (central London focused REIT), Serco
(global outsourcing service provider) and Virgin Money (a challenger bank),
which has just received a bid approach from Nationwide. Subsequent to the
merger, we have been deploying those proceeds to align the combined portfolio
with our strategy, and the process is almost complete. We are utilising the
enlarged gearing facilities that were introduced post the merger. Eight of our
current top ten holdings remain as before, but we have chosen to take
advantage of the merger to reduce two of our largest positions on valuation
grounds. Our strategy remains unchanged, but investors will now also benefit
from reduced fees and an enhanced dividend policy.
ESG Engagement
As part of our investment process, our team meets companies to scrutinise
their strategy and operational performance; these meetings are also an
opportunity to engage with companies on ESG issues. One of the engagements we
had during the period under review was with Dunelm, the homewares retailer, on
its operational performance and sustainability issues. Our discussion focused
on the key topics of cybersecurity, living wage, gender pay gap and
responsible sourcing. We had previously asked the company for full disclosure
on its cybersecurity framework and it has since further developed its IT
security governance and recruited to increase this capability. It was
encouraging to see the progress the company has made in identifying
vulnerabilities and uplifting its framework around these risks. In relation to
wages and the gender pay gap, we had previously asked for additional
disclosures relating to fair pay, and this has been clearly articulated within
their latest sustainability report.
The company has also revised its pay structure and is especially sensitive to
this in relation to its lowest paid employees whose financial situation may be
more impacted by the escalation of living costs. In addition we asked the
company to explain progress regarding long-term targets on responsible
sourcing and incorporating a decarbonisation plan and its plans for own brand
cotton to be sourced as 'responsible cotton' by 2024. The company confirmed
such programmes were in place and it is making progress in terms of expanding
its Product Quality & Sustainability team by recruiting two environmental
specialists. We were pleased to see the progress Dunelm has made with many
identified topics having been revised/issues solved. We will continue to
engage with the company.
Outlook
With all the appalling events going on globally, imminent elections bringing
potential changes in the US and UK, and a turgid UK economy, it is all too
easy to be gloomy about prospects. While the average GDP growth forecast for
2024 is a modest 0.4% in the UK, inflation is predicted to end the year just
above target at 2.2%, and the market is expecting interest rates cuts during
the year. Add to this low levels of unemployment, stable house prices,
declining energy costs, rising real wages helped by National Insurance cuts,
the imminent rise in the National Living Wage and prospects appear brighter.
The UK is predominantly a services economy, so the health of the consumer is
crucial. The overall resilience of the consumer since the outbreak of the war
in Ukraine has been little short of astonishing, given the numerous financial
headwinds. The most recent Gfk consumer confidence survey demonstrates a
notable rebound in individuals' views on their personal financial situation,
and the services PMI (Purchasing Managers' Indices) data of 53.4 suggests an
expanding economy. We do not want to get carried away by these and other
positive data points, but it does appear that both consumers and companies are
adapting to the reality of higher interest rates.
As ever, our focus is on the companies themselves. Overall the message we are
hearing from our holdings is a positive one. Many smaller companies have
continued successfully to navigate their way through the headwinds of cost
inflation, wage inflation, labour shortages and higher interest costs.
Additionally, M&A continues apace, as acquirers recognise the value that
is on offer. In addition to the bid for our holding in Ergomed, Equals Group
is in receipt of ongoing interest, and post period end we received a bid for
the housebuilder Redrow by its larger competitor Barratt Developments.
We continue to find exciting and undervalued (and often fairly unknown)
investment opportunities within our broad and diverse universe, some of which
we have detailed above. The current gearing level of just under 10% reflects
our confidence in the compelling opportunities and valuations currently
available.
Georgina Brittain
Katen Patel
Portfolio Managers
22nd March 2024
INTERIM MANAGEMENT REPORT
The Company is required to make the following disclosures in its half year
report:
Principal and Emerging Risks and Uncertainties
The principal risks and uncertainties faced by the Company have not changed
significantly and fall into the following broad categories: strategic and
performance; discount/premium; smaller company investment and market;
political and economic; investment management team; accounting, legal and
regulatory; cybercrime; and climate change. Information on each of these areas
is given in the Strategic Report within the Annual Report and Financial
Statements for the year ended 31st July 2023 and in the view of the Board,
these principal risks and uncertainties are as applicable to the remaining six
months of the financial year as they were to the period under review. The
Board, through the Audit Committee, has not identified any emerging risks.
Related Parties Transactions
During the first six months of the current financial year, no transactions
with related parties have taken place which have materially affected the
financial position or the performance of the Company during the period.
Going Concern
The Directors believe, having considered the Company's investment objectives,
risk management policies, capital management policies and procedures, nature
of the portfolio (including its liquidity) and expenditure projections, that
the Company has adequate resources, an appropriate financial structure and
suitable management arrangements in place to continue in operational existence
for the foreseeable future and more specifically, that there are no material
uncertainties pertaining to the Company that would prevent its ability to
continue in such operational existence for at least 12 months from the date of
the approval of this half year financial report. For these reasons, they
consider there is reasonable evidence to continue to adopt the going concern
basis in preparing the financial statements.
Directors' Responsibilities
The Board of Directors confirms that, to the best of its knowledge:
(i) the condensed set of financial statements contained within the
half year financial report has been prepared in accordance with FRS 104
'Interim Financial Reporting' and gives a true and fair view of the state of
affairs of the Company and of the assets, liabilities, financial position and
net return of the Company, as at 31st January 2024, as required by the UK
Listing Authority Disclosure and Transparency Rules 4.2.4R; and
(ii) the half year management report includes a fair review of the
information required by 4.2.7R and 4.2.8R of the UK Listing Authority
Disclosure and Transparency Rules.
In order to provide these confirmations, and in preparing these financial
statements, the Directors are required to:
• select suitable accounting policies and then apply them
consistently;
• make judgements and accounting estimates that are reasonable
and prudent;
• state whether applicable UK Accounting Standards have been
followed, subject to any material departures disclosed and explained in the
financial statements; and
• prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company will continue in
business;
and the Directors confirm that they have done so.
For and on behalf of the Board
Andrew Impey
Chairman
22nd March 2024
CONDENSED STATEMENT OF COMPREHENSIVE INCOME
(Unaudited) (Unaudited) (Audited)
Year ended
31st July 2023
Six months ended Six months ended
31st January 2024 31st January 2023
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Gains/(losses) on investments
held at fair value through
profit or loss - 17,756 17,756 - (4,427) (4,427) - (17,843) (17,843)
Net foreign currency
gains/(losses) - - - - 3 3 - (2) (2)
Income from investments 3,375 - 3,375 2,848 - 2,848 8,515 - 8,515
Interest receivable and
similar income 117 - 117 67 - 67 152 - 152
Gross return/(loss) 3,492 17,756 21,248 2,915 (4,424) (1,509) 8,667 (17,845) (9,178)
Management fee (229) (534) (763) (289) (674) (963) (581) (1,356) (1,937)
Other administrative expenses (248) - (248) (288) - (288) (559) - (559)
Net return/(loss) before
finance costs and taxation 3,015 17,222 20,237 2,338 (5,098) (2,760) 7,527 (19,201) (11,674)
Finance costs (288) (672) (960) (140) (327) (467) (344) (803) (1,147)
Net return/(loss) before taxation 2,727 16,550 19,277 2,198 (5,425) (3,227) 7,183 (20,004) (12,821)
Taxation - - - (15) - (15) (36) - (36)
Net return/(loss) after taxation 2,727 16,550 19,277 2,183 (5,425) (3,242) 7,147 (20,004) (12,857)
Return/(loss) per share (note 3) 3.50p 21.22p 24.72p 2.80p (6.95)p (4.15)p 9.16p (25.63)p (16.47)p
All revenue and capital items in the above statement derive from continuing
operations. No operations were acquired or discontinued in the period.
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.
The net return after taxation represents the profit or loss for the period and
also the total comprehensive income.
CONDENSED STATEMENT OF CHANGES IN EQUITY
Called up Capital
share Share redemption Capital Revenue
capital premium reserve reserves(1) reserve(1) Total
£'000 £'000 £'000 £'000 £'000 £'000
Six months ended 31st January 2024 (Unaudited)
At 31st July 2023 3,981 25,895 2,903 200,244 9,181 242,204
Repurchase of shares into Treasury - - - (368) - (368)
Net return - - - 16,550 2,727 19,277
Dividend paid in the period (note 4) - - - - (6,010) (6,010)
At 31st January 2024 3,981 25,895 2,903 216,426 5,898 255,103
Six months ended 31st January 2023 (Unaudited)
At 31st July 2022 3,981 25,895 2,903 220,248 7,420 260,447
Net (loss)/return - - - (5,425) 2,183 (3,242)
Dividend paid in the period (note 4) - - - - (5,386) (5,386)
At 31st January 2023 3,981 25,895 2,903 214,823 4,217 251,819
Year ended 31st July 2023 (Audited)
At 31st July 2022 3,981 25,895 2,903 220,248 7,420 260,447
Net (loss)/return - - - (20,004) 7,147 (12,857)
Dividend paid in the year (note 4) - - - - (5,386) (5,386)
At 31st July 2023 3,981 25,895 2,903 200,244 9,181 242,204
(1) Revenue reserve and part of the Capital reserves form the
distributable reserves of the Company and may be used to fund distribution of
profits to Shareholders. In respect of the Capital reserves, £66,628,000
relates to net investment holding gains that are not distributable.
CONDENSED STATEMENT OF FINANCIAL POSITION
(Unaudited) (Unaudited) (Audited)
At 31st January At 31st January At 31st July
2024 2023 2023
£'000 £'000 £'000
Fixed assets
Investments held at fair value through profit or loss 280,453 271,061 265,249
Current assets
Debtors 681 647 705
Cash and cash equivalents 4,226 2,345 4,027
4,907 2,992 4,732
Current liabilities
Creditors: amounts falling due within one year (30,257) (22,234) (27,777)
Net current liabilities (25,350) (19,242) (23,045)
Total assets less current liabilities 255,103 251,819 242,204
Net assets 255,103 251,819 242,204
Capital and reserves
Called up share capital 3,981 3,981 3,981
Share premium 25,895 25,895 25,895
Capital redemption reserve 2,903 2,903 2,903
Capital reserves 216,426 214,823 200,244
Revenue reserve 5,898 4,217 9,181
Total Shareholders' funds 255,103 251,819 242,204
Net asset value per share (note 5) 327.5p 322.6p 310.3p
CONDENSED STATEMENT OF CASH FLOWS
(Unaudited) (Unaudited) (Audited)
Six months ended Six months ended Year ended
31st January 2024 31st January 2023(1) 31st July 2023
£'000 £'000 £'000
Cash flows from operating activities
Net return/(loss) before finance costs and taxation 20,237 (2,760) (11,674)
Adjustment for:
Net (gains)/losses on investments held at fair value through
profit or loss (17,756) 4,427 17,843
Net foreign currency (gains)/losses - (3) 2
Dividend income (3,375) (2,821) (8,488)
Interest income (117) (67) (152)
Scrip Dividends received as income - (27) (27)
Realised losses/(gains) on foreign exchange transactions - 3 (2)
Increase in accrued income and other debtors (2) (38) (6)
(Decrease)/increase in accrued expenses (60) (21) 68
Net cash outflow from operations before dividends and interest (1,073) (1,307) (2,436)
Dividends received 3,799 3,432 8,505
Interest received 117 77 162
Net cash inflow from operating activities 2,843 2,202 6,231
Purchases of investments (31,171) (43,844) (92,884)
Sales of investments 35,903 44,132 85,485
Net cash inflow/(outflow) from investing activities 4,732 288 (7,399)
Dividends paid (6,010) (5,386) (5,386)
Repayment of bank loan - (4,000) (6,000)
Drawdown of bank loan - - 8,000
Repurchase of shares into Treasury (368) - -
Interest paid (998) (409) (1,069)
Net cash outflow from financing activities (7,376) (9,795) (4,455)
Increase/(decrease) in cash and cash equivalents 199 (7,305) (5,623)
Cash and cash equivalents at start of period/year 4,027 9,650 9,650
Cash and cash equivalents at end of period/year 4,226 2,345 4,027
Cash and cash equivalents consist of:
Cash and short term deposits 332 346 265
Cash held in JPMorgan GBP Liquidity LVNAV Fund 3,894 1,999 3,762
Total 4,226 2,345 4,027
(1) The presentation of the Cash Flow Statement, as permitted under
FRS 102, has been changed so as to present the reconciliation of 'net return
before finance costs and taxation' to 'cash inflow from operating activities'
on the Cash Flow Statement. Previously, this was shown by way of note to the
Cash Flow Statement. Interest paid has also been reclassified to financing
activities, previously shown under operating activities, as this relates to
the bank loan. Other than changes in presentation, there is no change to the
cash flows as presented in previous periods.
Analysis of change in net debt
As at Other As at
31st July non-cash 31st January
2023 Cash flows charges 2024
£'000 £'000 £'000 £'000
Cash and cash equivalents
Cash 265 67 - 332
Cash equivalents 3,762 132 - 3,894
4,027 199 - 4,226
Borrowings
Debt due in less than one year (27,000) - - (27,000)
(27,000) - - (27,000)
Net debt (22,973) 199 - (22,774)
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
For the six months ended 31st January 2024
1. Financial statements
The information contained within the condensed financial statements in this
half year report has not been audited or reviewed by the Company's auditors.
The figures and financial information for the year ended 31st July 2023 are
extracted from the latest published financial statements of the Company and do
not constitute statutory accounts for that year. Those financial statements
have been delivered to the Registrar of Companies and including the report of
the auditors which was unqualified and did not contain a statement under
either section 498(2) or 498(3) of the Companies Act 2006.
2. Accounting policies
The financial statements have been prepared in accordance with the Companies
Act 2006, FRS 102 'The Financial Reporting Standard applicable in the UK and
Republic of Ireland' of the United Kingdom Generally Accepted Accounting
Practice ('UK GAAP') and with the Statement of Recommended Practice
'Financial Statements of Investment Trust Companies and Venture Capital
Trusts' (the revised 'SORP') issued by the Association of Investment Companies
in July 2022.
FRS 104, 'Interim Financial Reporting', issued by the Financial Reporting
Council ('FRC') in March 2015 has been applied in preparing this condensed set
of financial statements for the six months ended 31st January 2024.
All of the Company's operations are of a continuing nature.
The accounting policies applied to this condensed set of financial statements
are consistent with those applied in the financial statements for the year
ended 31st July 2023.
3. Return/(loss) per share
(Unaudited) (Unaudited) (Audited)
Six months ended Six months ended Year ended
31st January 2024 31st January 2023 31st July 2023
£'000 £'000 £'000
Return per share is based on the following:
Revenue return 2,727 2,183 7,147
Capital return/(loss) 16,550 (5,425) (20,004)
Total return/(loss) 19,277 (3,242) (12,857)
Weighted average number of shares in issue 77,979,930 78,051,669 78,051,669
Revenue return per share 3.50p 2.80p 9.16p
Capital return/(loss) per share 21.22p (6.95)p (25.63)p
Total return/(loss) per share 24.72p (4.15)p (16.47)p
4. Dividends paid
(Unaudited) (Unaudited) (Audited)
Six months ended Six months ended Year ended
31st January 2024 31st January 2023 31st July 2023
£'000 £'000 £'000
2023 final dividend of 7.7p (2022: 6.9p) 6,010 5,386 5,386
Total dividends paid in the period/year 6,010 5,386 5,386
All dividends paid in the period have been funded from the revenue reserve.
As disclosed in the Prospectus dated 23rd January 2024, in respect of the
Issue of Scheme Shares pursuant to a scheme of reconstruction of JPMorgan Mid
Cap Investment Trust plc ('the Combination'), the Company paid a
pre-completion dividend of 3.60 pence per share to Shareholders on 27th
February 2024.
Furthermore, the Company has introduced an enhanced dividend policy, targeting
a 4% yield on the NAV per annum, calculated on the basis of 4% of audited NAV
as at the end of the preceding financial year of the Company.
Following the successful completion of the Combination and in lieu of any
other interim dividend for the financial year of the Company ended 31st July
2024, the Company will announce an interim dividend of 2% of the unaudited NAV
of the enlarged Company as at the date of Admission (28th February 2024). This
interim dividend is expected to be announced in May 2024 and will be paid to
Shareholders in July 2024.
5. Net asset value per share
(Unaudited) (Unaudited) (Audited)
Six months ended Six months ended Year ended
31st January 2024 31st January 2023 31st July 2023
Net assets (£'000) 255,103 251,819 242,204
Number of shares in issue 77,901,669 78,051,669 78,051,669
Net asset value per share 327.5p 322.6p 310.3p
6. Fair valuation of investments
The fair value hierarchy disclosures required by FRS 102 are given below:
(Unaudited) (Unaudited) (Audited)
Six months ended Six months ended Year ended
31st January 2024 31st January 2023 31st July 2023
Assets Liabilities Assets Liabilities Assets Liabilities
£'000 £'000 £'000 £'000 £'000 £'000
Level 1 280,453 - 271,061 - 264,375 -
Level 3(1) - - - - 874 -
Total 280,453 - 271,061 - 265,249 -
1 Relates to Braemar PLC which requested a temporary suspension of
its listing on the Main Market of the London Stock Exchange on 3rd July 2023
due to a delay in the publication of its annual results pending an
investigation into historic payments made by Braemar. Following the
announcement on 22nd September 2023, the company published its final results
for FY23 in November 2023, whereafter the board requested a restoration of its
listing. The investment in Braemar has been valued based on the last traded
price available prior to suspension.
31st January 2024 31st January 2023 31st July 2023
Equity Equity Equity
Investments Total Investments Total Investments Total
£'000 £'000 £'000 £'000 £'000 £'000
Level 3
Opening balance 874 874 - - - -
Sales (1,040) (1,040) - - - -
Transfers into Level 3 - - - - 1,233 1,233
Change in fair value of investment
during the year 166 166 - - (359) (359)
Total - - - - 874 874
JPMORGAN FUNDS LIMITED
22nd March 2024
For further information, please contact:
Lucy Dina
For and on behalf of
JPMorgan Funds Limited
020 7742 4000
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 ASSET MANAGEMENT (UK) LIMITED
ENDS
A copy of the Half Year Report will shortly be submitted to the FCA's National
Storage Mechanism and will be available for inspection at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism)
The Half Year Report will also shortly be available on the Company's website
where up to date information on the Company, including daily NAV and share
prices, factsheets and portfolio information can also be found.
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