REG - JPMorgan UK Sml Cap - Half-year Report
24/03/2025 17:00
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RNS Number : 9384B JPMorgan UK Small Cap Grwth&Inc PLC 24 March 2025
LONDON STOCK EXCHANGE ANNOUNCEMENT
JPMORGAN UK SMALL CAP GROWTH & INCOME PLC
UNAUDITED HALF YEAR RESULTS FOR THE SIX MONTHS ENDED
31ST JANUARY 2025
Legal Entity Identifier: 549300PXALXKUMU9JM18
Information disclosed in accordance with DTR 4.2.2
Highlights:
· Investment Performance: The Company's total return on net assets
for the six months ended 31st January 2025 was -7.0%, underperforming its
benchmark, the Numis Smaller Companies plus AIM Index, which returned -3.9%.
The negative returns were largely driven by a deterioration in market
sentiment towards UK equities, influenced by geopolitical tensions and
domestic economic policies. Despite the Company's disappointing performance,
the Company ranked in the first quartile of its peer group, indicating that it
was not alone in lagging behind the benchmark.
· Dividend Policy: Following the Combination with JPMorgan Mid Cap
Investment Trust plc in February 2024, the Company introduced an enhanced
dividend policy targeting a 4% yield on NAV per annum, with dividends paid
quarterly. Two quarterly interim dividends totalling 7.52 pence per share were
declared during the reporting period.
· Gearing and Loan Facility: The Company maintained a gearing level of
9.5% as of 31st January 2025; post period end the Company entered into a new
£55 million borrowing facility, which can be increased to £90 million under
an accordion arrangement.
· Share Repurchases: During the reporting period, the Company
repurchased 2,550,000 shares into Treasury, equivalent to 1.9% of the shares
in issue, at an average discount of 11.0%.
Katrina Hart, Chair, commented:
Katrina Hart noted the challenging market conditions for small cap investors
and expressed disappointment in the negative returns. Despite the recent
underperformance, she emphasised the Company's strong long-term performance
over one, three, five and ten year periods (to 31st January 2025) and
confidence in the Manager's ability to navigate the current market
dislocation. She highlighted the extreme share price volatility and the
widening discount to net asset value, attributing these to negative market
sentiment rather than underlying operating prospects. The Chair remains
optimistic about the company's future, citing opportunities arising from the
current market conditions.
"It is no exaggeration to describe current conditions in global equity markets
as febrile. However, such dislocation provides incredible opportunities for
experienced stock pickers who are not constrained by benchmarks.
The Portfolio Managers and their wider team build longstanding relationships
with companies they get to know intimately; companies whose fortunes are not
necessarily tied to world events and which are nimble enough to steer their
own path, whatever the geopolitical backdrop."
Georgina Brittain and Katen Patel, Portfolio Managers of JUGI, commented:
Georgina Brittain and Katen Patel, Portfolio Managers, acknowledged the
geopolitical tensions and economic challenges impacting the market. They noted
the Company's underperformance against the benchmark due to post-Budget
concerns and market volatility. However, they highlighted positive
contributions from key portfolio positions and ongoing M&A activity.
"As ever, our focus is on the companies themselves. Overall, the message we
are hearing from our companies remains a positive one. Additionally, M&A
continues apace, as acquirors recognise the undoubted value that is on offer,
and the Company continues to benefit from this. We are still finding exciting
and undervalued investment opportunities within our broad and diverse
universe. The current market volatility provides an opportunity to take
advantage of share price over-reactions. We believe that our focus on
long-term winners will continue to benefit our shareholders."
CHAIR'S STATEMENT
Investment Performance and Overview
Against a very challenging market backdrop for small cap investors since the
UK election last summer, it is disappointing to report that over this short
period of six months to 31st January 2025, the Company's total return on net
assets (with net dividends reinvested) was -7.0%. This represents
underperformance of 3.1% against our benchmark, the Numis Smaller Companies
plus AIM (excluding Investment Companies) Index, which returned -3.9%.
The Company was not alone in lagging the benchmark, as demonstrated by the
fact that it ranked in the first quartile of its direct peer group over the
period. Shareholders should also take considerable comfort from the fact that
bad news is a rare occurrence for the Company, which has outperformed its
benchmark on an annualised basis over one, two, three, five and ten year
periods to 31st January 2025. The Board ensures it understands the drivers of
performance, as well as the risks taken to achieve it, and remains confident
that you are in safe hands.
It is notable that during the six months to 31st January 2025, the average
forward price to earnings ratio across the Company's portfolio declined, and
notably the historic free cashflow yield increased from 6.4% to 8.0%, while
overall earnings expectations for the portfolio as a whole improved. These
statistics show that the negative returns during the period were entirely
driven by a deterioration in market sentiment rather than underlying operating
prospects. In addition, share price volatility has been extreme, indicating an
irrational response to news flow. By way of illustration, share prices on the
day on which FTSE 350 companies report results typically move by 1.8 times the
average daily price movement; over the past quarter, this has risen to
3.2 times. The Investment Manager's Report that follows provides a commentary
on the portfolio positioning and the current outlook for investing in the UK.
I trust it will provide reassurance and, indeed, optimism.
Even more frustrating is the total return on share price of -15.6% for the
six-month reporting period. This reflects a marked widening of the share price
discount to net asset value from just 1.1% at the start of the financial year
(when sentiment towards UK equities was less negative) to 10.3% at the end of
the half year. The Board is closely involved with monitoring the relationship
between the share price and net asset value. It is difficult to remember a
time when sentiment was so indiscriminately negative towards UK smaller
companies as well as to investment trusts and, as such, the Company has been
in the firing line. The Board and the Manager do not share the negative
consensus view and believe that even a moderation in the negative flows from
UK equity markets will be beneficial to the Company's rating. Nevertheless, we
are committed to rectifying these anomalies through, among other things, a
reinvigorated marketing effort, share buybacks (discussed further below) and
active consideration of further corporate opportunities arising from the
current market dislocation.
Since the end of the reporting period, from 31st January 2025 to 21st March
2025, the Company's total return on net assets was -4.9%, slightly
outperforming the Company's benchmark index by 0.1%. Over the same period, the
Company delivered a return to ordinary shareholders of -6.3% as the discount
widened marginally.
Share Repurchases and Issuance
During the six months to 31st January 2025, the Company repurchased 2,550,000
shares into Treasury (equivalent to 1.9% of the shares in issue) at an average
discount of 11.0%. The Company did not issue any shares. As at 21st March
2025, despite buying back shares, the issued share capital (excluding Treasury
shares) is 70% greater than before the Combination with JPMorgan Mid Cap
Investment Trust plc ('JMF') in February 2024, giving us increased flexibility
to support the share price. The Board's objective remains to act in the best
interests of shareholders, using the repurchase and allotment authorities to
manage imbalances between the supply of and demand for the Company's shares
with the intention of reducing the volatility of the discount or premium. As
at the end of the reporting period there were 139,141,277 shares in issue
(including 4,259,741 shares held in Treasury).
Since the period end, as at 21st March 2025, the Company has repurchased a
further 2,760,000 shares into Treasury (equivalent to 2.0% of the shares in
issue) at an average discount of 11.1%.
Dividends
Following the Combination with JMF, the Company introduced an enhanced
dividend policy, targeting a 4% yield on the NAV per annum, calculated on the
basis of 4% of unaudited NAV as at 31st July each year, being the end of the
preceding financial year of the Company. As a result, the Company now pays
four equal quarterly interim dividends, announced in August, November,
February and May and expected to be paid in October, January, April and July
each year.
On 2nd August 2024 the Company announced that the unaudited cum income Net
Asset Value at the close of business on 31st July 2024 (the Company's
year-end) was 376.24 pence per share. In line with the Company's distribution
policy, the Directors declared the first quarterly interim dividend of
3.76 pence per share for the year ending 31st July 2025. Since then, two
further dividend declarations have been made on 1st November 2024 and 3rd
February 2025, both of 3.76 pence per share. With the planned final quarterly
dividend declaration of 3.76 pence per share on 1st May 2025, the 2025 annual
dividend will amount to 15.04 pence per share.
Loan Facility and Gearing
During the reporting period, the Company continued to utilise its secured £55
million revolving credit facility (with an option to increase to £90 million)
to maintain a modest but meaningful level of gearing, with total borrowings of
£53 million at the end of the period .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 7.4% to 10.6%, ending the half-year at 9.5%
as the Portfolio Managers took advantage of perceived attractive valuations.
Whilst gearing exacerbated negative returns from the portfolio during the six
months to 31st January 2025, the longer term benefits to performance remain
intact and the Board views gearing as a valuable tool in the Company's
armoury.
Since the end of the reporting period, the Company has arranged a new £55
million rolling 360 day facility with Bank of America on improved and more
flexible terms than the facility replaced, including the option to increase
the loan by £35 million to £90 million.
As at 21st March 2025 the Company's gearing was 9.9%, with total borrowings of
£53 million.
Board Succession
The Combination with JMF in February 2024 has enabled the Board to benefit
over the reporting period from the contribution of three new Directors joining
from JMF. In particular, this has expanded the Board's competence in marketing
and small cap operating experience. The enlarged Board has bedded down well
and enjoyed sharing ideas about how to make our meetings as valuable as
possible.
Andrew Impey retired as Chairman following the AGM in November 2024, having
completed nine years as a non-executive Director, including nearly five as
Chairman. On behalf of the Board, I would like to thank Andrew for his
excellent leadership and his significant contribution to both the Board and
the performance of the Company. Following consultation between Alice Ryder,
Senior Independent Director, and each of my colleagues, I was delighted to be
asked to succeed Andrew as Chair. I will strive to support our shareholders as
keenly as he did.
Richard Gubbins also retired as a Director following the 2024 AGM. The Board
and I would like to thank him for his valuable contribution to both this
Company, following the Combination with JMF, and for his commitment during his
seven years on that board.
The Board believes that the current number of five Directors is appropriate
for the needs of the Company and that the Board as a whole fulfils all of the
relevant skills and experience. In accordance with the FCA's new policy on
diversity, the Board currently complies with the gender recommendation; it is
committed to increasing other forms of diversity over time to ensure the
Board's discussions always benefit from fresh and varied perspectives.
Outlook
It is no exaggeration to describe current conditions in global equity markets
as febrile; the dash for 'gold and guns' says it all. However, such
dislocation provides incredible opportunities for experienced stock pickers
who are not constrained by benchmarks. At a time when global geopolitics are
only predictable in their unpredictability, the appeal of keeping things close
to home has never been greater. The Portfolio Managers and their wider team
build longstanding relationships with companies they get to know intimately;
companies whose fortunes are not necessarily tied to world events and which
are nimble enough to steer their own path, whatever the geopolitical backdrop.
The new UK government has committed to fostering support for London's stock
market, while any evidence that its growth agenda is taking effect should be
positive for consumer and business confidence. Thank you for supporting the
Company; we believe you will be as richly rewarded in the future as you have
been in the past.
Katrina Hart
Chair
24th March 2025
INVESTMENT MANAGER'S REPORT
Performance and Market Background
Geopolitical tensions remained very much in the foreground during the first
half of our financial year to January 2025. Russia's war against Ukraine
continued, although at the time of writing this report there are very positive
signs of an end in sight. For much of the period under review, the fighting in
Gaza also continued, but thankfully hostilities there look to have ceased. US
elections saw Trump win a landslide victory, bringing with it the strong
likelihood of tariffs on numerous products, while in France and Germany
politics was also in the forefront.
In the UK, post Labour's win in the July election, the new Government severely
dented both business and consumer confidence, initially by incessantly talking
down the UK economy, and then with its first Budget. This contained large tax
increases, centred mainly on employers' National Insurance burden. Interest
rates were reduced by 25 basis points twice in the six months, in August and
November, to a still high level of 4.75%, as inflation continued to reduce.
Against this backdrop, the Numis Smaller Companies plus AIM (excluding
Investment Trusts) Index was down by -3.9% for the six month period. The
Company underperformed during the half year following a trickier period caused
by post Budget concerns and produced a total return on net asset value of
-7.0%. Having been close to par at the Company's year-end in July, the
discount widened notably in the six months, leading to a share price total
return of -15.6%. However, the Company's ordinary share price is up almost 12%
over the 12 months to 31st January 2025.
Portfolio
On the positive side, two of our largest positions contributed to performance
over the half year. These were Bank of Georgia (one of the two dominant banks
in the flourishing economy of Georgia, despite the political upheaval), and
Jet2, the holiday company. Other strong performers in the portfolio included
the UK construction company, Morgan Sindall (aided by the demise of a large
competitor) and XPS Pensions (pensions consulting and administration). On the
negative side, the largest detractor was Ashtead Technology (subsea rental
equipment into the oil and gas and renewables markets). Despite strong
results, great growth opportunities and an accretive acquisition, the shares
significantly underperformed during the period. In addition, our position in
Warpaint London (value cosmetics) performed poorly, despite producing profits
and earnings in line with market forecasts. We believe this negative
performance was due to a small undershoot on the revenue line, not helped by a
profit warning from elfcosmetics, a huge cosmetics company focused largely in
the USA. In addition our holding in Next Fifteen Communications (business
consultancy) had an extremely disappointing trading statement.
Over the period we have made certain changes to the portfolio. New additions
included one IPO, Applied Nutrition, which makes nutritional products for
athletes and gym-goers; Alumasc, which makes sustainable building products;
Trustpilot, the company which runs the well-known review website, and Just
Group, a financial services company focussed on retirement products. Bids
continued to be a major theme in the smaller companies arena, and we received
money from our bids in Ascential, Redrow and Alpha Financial Markets. Two
further bids were received in the half year, for Equals Group and Loungers,
and both have been agreed and we await the cash. We also sold out of certain
holdings including Bodycote and Solid State on concerns over current trading;
and sadly after many years in the portfolio we had to exit Games Workshop on
its promotion into the FTSE 100.
Outlook
The negative focus of the British press regarding the UK economy is pervasive.
We agree that the economy has been slowing, and inflation rising again.
However, while recently reduced, the most current Bank of England forecast for
GDP growth in 2025 is 0.75%, and while inflation remains above target, it is
nowhere near the levels endured in the recent past. Indeed, if the war in
Ukraine does end swiftly, the impact on energy prices will have a significant
positive impact on the level of inflation.
There are notable positives to counter the negatives. The UK electoral system
ensures political stability. Interest rates are declining, and the downward
trajectory is clear. Wage inflation remains strong, well above the level of
inflation, as demonstrated by the recent Asda Income Tracker data. This
measures discretionary disposable income for UK consumers, and the January
data showed household disposable income rising by 11% per week versus one year
ago. Consumer confidence has also seen a (small) pick up recently, hitting a
four-month high, as the dust settles post the Budget. The savings rate, i.e.
the proportion of households' income that is saved, remains abnormally high
versus history. The UK is a consumer-driven economy, with consumer spending
contributing around 60% to GDP. If consumers begin to feel more confident,
this high level of savings should reduce, feeding into stronger economic
growth.
As ever, our focus is on the companies themselves. Overall, the message we are
hearing from our companies remains a positive one. Additionally, M&A
continues apace, as acquirors recognise the undoubted value that is on offer,
and the company continues to benefit from this, as outlined in the Portfolio
section above. We are still finding exciting and undervalued investment
opportunities within our broad and diverse universe, some of which we have
outlined above. The current market volatility provides an opportunity to take
advantage of share price over-reactions. We believe that our focus on
long-term winners will continue to benefit our shareholders.
Georgina Brittain
Katen Patel
Portfolio Managers
24th March 2025
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 2024 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 2025, 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
Katrina Hart
Chair
24th March 2025
CONDENSED STATEMENT OF COMPREHENSIVE INCOME
(Unaudited) (Unaudited) (Audited)
Six months ended Six months ended Year ended
31st January 2025 31st January 2024 31st July 2024
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
(Losses)/gains on investments held at fair value through profit or loss - (40,398) (40,398) - 17,756 17,756 - 88,070 88,070
Net foreign currency gains - - - - - - - 4 4
Income from investments 6,192 - 6,192 3,375 - 3,375 12,225 3,903 16,128
Interest receivable and similar income 283 - 283 117 - 117 318 - 318
Gross return/(loss) 6,475 (40,398) (33,923) 3,492 17,756 21,248 12,543 91,977 104,520
Management fee (402) (936) (1,338) (229) (534) (763) (490) (1,141) (1,631)
Other administrative expenses (493) - (493) (248) - (248) (537) - (537)
Net return/(loss) before finance costs and taxation 5,580 (41,334) (35,754) 3,015 17,222 20,237 11,516 90,836 102,352
Finance costs (487) (1,137) (1,624) (288) (672) (960) (796) (1,858) (2,654)
Net return/(loss) before taxation 5,093 (42,471) (37,378) 2,727 16,550 19,277 10,720 88,978 99,698
Taxation (45) - (45) - - - - - -
Net return/(loss) after taxation 5,048 (42,471) (37,423) 2,727 16,550 19,277 10,720 88,978 99,698
Return/(loss) per share (note 3) 3.68p (30.96)p (27.28)p 3.50p 21.22p 24.72p 10.39p 86.26p 96.65p
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 Other Capital Revenue
capital premium reserve reserve(1,2) reserves(1) reserve(1) Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Six months ended 31st January 2025 (Unaudited)
At 31st July 2024 6,957 216,150 2,903 - 288,853 2,209 517,072
Cancellation of Share premium - (216,150) - 216,150 - - -
Repurchase of Ordinary shares into Treasury - - - (7,591) - - (7,591)
Net (loss)/return - - - - (42,471) 5,048 (37,423)
Dividend paid in the period - - - - (3,078) (7,257) (10,335)
(note 4)
At 31st January 2025 6,957 - 2,903 208,559 243,304 - 461,723
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 Ordinary 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
Year ended 31st July 2024 (Audited)
At 31st July 2023 3,981 25,895 2,903 - 200,244 9,181 242,204
Repurchase of Ordinary shares into Treasury - - - - (369) - (369)
Issue of Ordinary shares in respect of the Combination with JMF (3) 2,976 190,497 - - - - 193,473
Costs in relation to issue of Ordinary shares - (242) - - - - (242)
Net return - - - - 88,978 10,720 99,698
Dividends paid in the year - - - - - (17,692) (17,692)
(note 4)
At 31st July 2024 6,957 216,150 2,903 - 288,853 2,209 517,072
(1) Revenue reserve, Other 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, including the repurchase of the Company's own
shares. In respect of the Capital reserves, £83,863,000 relates to net
investment holding gains.
(2) Other reserve was created during the six month period following
approval by the High Court to cancel the balance on the share premium account
as at close of business on 1st August 2024. This forms part of the Company's
distributable reserves.
(3) JPMorgan Mid Cap Investment Trust plc (JMF).
CONDENSED STATEMENT OF FINANCIAL POSITION
(Unaudited) (Unaudited) (Audited)
At 31st January At 31st January At 31st July
2025 2024(1) 2024(1)
£'000 £'000 £'000
Fixed assets
Investments held at fair value through profit or loss 505,513 280,453 561,947
Current assets
Debtors 2,168 681 4,332
Current asset investments(1) 8,313 3,894 8,256
Cash at bank 253 332 257
10,734 4,907 12,845
Current liabilities
Creditors: amounts falling due within one year (54,524) (30,257) (57,720)
Net current liabilities (43,790) (25,350) (44,875)
Total assets less current liabilities 461,723 255,103 517,072
Net assets 461,723 255,103 517,072
Capital and reserves
Called up share capital 6,957 3,981 6,957
Share premium - 25,895 216,150
Capital redemption reserve 2,903 2,903 2,903
Other reserve(2) 208,559 - -
Capital reserves 243,304 216,426 288,853
Revenue reserve - 5,898 2,209
Total shareholders' funds 461,723 255,103 517,072
Net asset value per share (note 5) 342.3p 327.5p 376.2p
(1) For the period ended 31st January 2024 and year ended 31st July
2024, the 'Cash and cash equivalents' line item in the Statement of Financial
Position has been revised to 'Cash at bank' and 'Current asset investments.'
This revision separately reports investment in the JPMorgan GBP Liquidity Fund
as 'Current asset investments' in accordance with the statutory format
required by the Companies Act 2006. This adjustment does not affect any other
line items in the Statement of Financial Position or the total current assets.
(2) Other reserve was created during the year following approval by the
High Court to cancel the share premium account as at close of business on
1st August 2024.
Company registration number: 2515996.
CONDENSED STATEMENT OF CASH FLOWS
(Unaudited) (Unaudited) (Audited)
Six months ended Six months ended Year ended
31st January 2025 31st January 2024 31st July 2024
£'000 £'000 £'000
Cash flows from operating activities
Net (loss)/return before finance costs and taxation (35,754) 20,237 102,352
Adjustment for:
Net losses/(gains) on investments held at fair 40,398 (17,756) (88,070)
value through profit or loss
Dividend income (6,192) (3,375) (16,128)
Interest income (283) (117) (318)
Increase in accrued income and other debtors (31) (2) (6)
Increase/(decrease) in accrued expenses 104 (60) (12)
Net cash outflow from operating activities before dividends, interest and (1,758) (1,073) (2,182)
taxation
Dividends received 6,756 3,799 15,544
Interest received 283 117 318
Overseas withholding tax recovered - - 93
Net cash inflow from operating activities 5,281 2,843 13,773
Purchases of investments (59,917) (31,171) (157,705)
Sales of investments 76,279 35,903 113,317
Cost in relation to acquisition of assets - - (1,026)
Net cash inflow/(outflow) from investing activities 16,362 4,732 (45,414)
Dividends paid (10,335) (6,010) (17,692)
Net cash acquired following the Combination with JMF(1) - - 28,730
Costs in relation to issue of Ordinary shares - - (242)
Repurchase of Ordinary shares into Treasury (7,591) (368) (369)
Repayment of bank loans (2,000) - (5,000)
Drawdown of bank loans - - 33,000
Interest paid (1,664) (998) (2,300)
Net cash (outflow)/inflow from financing activities (21,590) (7,376) 36,127
Increase in cash and cash equivalents(2) 53 199 4,486
Cash and cash equivalents at start of period/year(2) 8,513 4,027 4,027
Cash and cash equivalents at end of period/year(2) 8,566 4,226 8,513
Cash and cash equivalents consist of (2):
Cash at bank 253 332 257
Current asset investment in the JPMorgan GBP Liquidity Fund 8,313 3,894 8,256
Total 8,566 4,226 8,513
(1) JPMorgan Mid Cap Investment Trust plc (JMF)
(2) The term 'cash and cash equivalents' is used for the purposes of the
Statement of Cash Flows.
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
For the six months ended 31st January 2025
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 2024 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 are prepared under the historical cost convention,
modified to include fixed asset investments at fair value, in accordance with
the Companies Act 2006, United Kingdom Generally Accepted Accounting Practice
('UK GAAP'), including FRS 102 'The Financial Reporting Standard applicable in
the UK and Republic of Ireland' and with the Statement of Recommended Practice
'Financial Statements of Investment Trust Companies and Venture Capital
Trusts' (the 'SORP') issued by the Association of Investment Companies in
July 2022.
FRS 104, 'Interim Financial Reporting', issued by the Financial Reporting
Council ('FRC') in March 2015 has been applied in preparing this condensed set
of financial statements for the six months ended 31st January 2025.
All of the Company's operations are of a continuing nature.
Except for the deduction of repurchases of shares from the Other reserve
(previously deducted from Capital reserves), 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 2024.
3. (Loss)/return per share
(Unaudited) (Unaudited) (Audited)
Six months ended Six months ended Year ended
31st January 2025 31st January 2024 31st July 2024
£'000 £'000 £'000
Return per share is based on the following:
Revenue return 5,048 2,727 10,720
Capital (loss)/return (42,471) 16,550 88,978
Total (loss)/return (37,423) 19,277 99,698
Weighted average number of shares in issue 137,185,340 77,979,930 103,151,749
Revenue return per share 3.68p 3.50p 10.39p
Capital (loss)/return per share (30.96)p 21.22p 86.26p
Total (loss)/return per share (27.28)p 24.72p 96.65p
4. Dividends
Dividend paid and declared
(Unaudited) (Unaudited) (Audited)
Six months ended Six months ended Year ended
31st January 2025 31st January 2024 31st July 2024
Pence £'000 Pence £'000 Pence £'000
Dividends paid
Final dividend for prior year - - 7.70 6,010 7.70 6,010
Pre-completion dividend (i) - - - - 3.60 2,804
Second interim dividend (ii) - - - - 6.46 8,878
First quarterly interim dividend 3.76 5,167 - - - -
Second quarterly interim dividend 3.76 5,168 - - - -
Total dividends paid in the period/year 7.52 10,335 7.70 6,010 17.76 17,692
Dividends declared
Third quarterly interim dividend 3.76 5,036 - - - -
All dividends paid in the period have been funded from the Revenue reserve and
part of the Capital reserves.
(i) 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.
(ii) Following the successful completion of the Combination and in lieu of any
other interim or final dividend for the financial year of the Company ended
31st July 2024, the Company paid a second interim dividend of 6.46p, based on
2% of the unaudited NAV of the enlarged Company as at the date of Admission
(28th February 2024).
(iii) The Company has introduced an enhanced dividend policy, targeting a 4%
yield on the NAV per annum, calculated on the basis of 4% of 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 has transitioned from paying a
single annual dividend to distributing four equal quarterly interim dividends.
These dividends will be announced in August, November, February and May and
are expected to be paid in October, January, April and July each year.
A third quarterly interim dividend of 3.76p per share amounting to
£5,036,000, has been declared payable for the year ending 31st July 2025.
The interim dividend will be paid on 1st April 2025 to shareholders on the
register at the close of business on 21st February 2025. The ex-dividend date
will be 20th February 2025.
5. Net asset value per share
(Unaudited) (Unaudited) (Audited)
Six months ended Six months ended Year ended
31st January 2025 31st January 2024 31st July 2024
Net assets (£'000) 461,723 255,103 517,072
Number of shares in issue 134,881,536 77,901,669 137,431,536
Net asset value per share 342.3p 327.5p 376.2p
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 2025 31st January 2024 31st July 2024
Assets Liabilities Assets Liabilities Assets Liabilities
£'000 £'000 £'000 £'000 £'000 £'000
Level 1 505,513 - 280,453 - 561,947 -
Total 505,513 - 280,453 - 561,947 -
(Unaudited) (Unaudited) (Audited)
Six months ended Six months ended Year ended
31st January 2025 31st January 2024 31st July 2024
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 - - - - - -
Change in fair value of investment during the year - - 166 166 - -
Total - - - - - -
7. Analysis of changes in net debt
As at Other As at
31st July non-cash 31st January
2024 Cash flows charges 2025
£'000 £'000 £'000 £'000
Cash and cash equivalents
Cash at bank 257 (4) - 253
Current asset investments(1) 8,256 57 - 8,313
8,513 53 - 8,566
Borrowings
Debt due in less than one year (55,000) 2,000 - (53,000)
Net debt (46,487) 2,053 - (44,434)
(1) JPMorgan GBP Liquidity Fund, a money market fund.
JPMORGAN FUNDS LIMITED
24th March 2025
For further information, please contact:
Lucy Dina
For and on behalf of
JPMorgan Funds Limited
Telephone: 0800 20 40 20 or or +44 1268 44 44 70
Neither the contents of the Company's website nor the contents of any website
accessible from hyperlinks on the Company's website (or any other website) is
incorporated into, or forms part of, this announcement.
ENDS
A copy of the half year will be submitted to the National Storage Mechanism
and will shortly be available for inspection at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism)
The Half Year Report will also shortly be available on the Company's website
at www.jpmrealassets.co.uk where up to date information on the Company,
including daily NAV and share prices, factsheets and portfolio information can
also be found.
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