TIDMJFJ
RNS Number : 9007Z
JPMorgan Japanese Inv. Trust PLC
23 May 2019
LONDON STOCK EXCHANGE ANNOUNCEMENT
JPMORGAN JAPANESE INVESTMENT TRUST PLC
UNAUDITED HALF YEAR RESULTS FOR THE SIX MONTHS
ED 31ST MARCH 2019
Legal Entity Identifier: 549300JZW3TSSO464R15
Information disclosed in accordance with the DTR 4.2.2
Chairman's Statement
Performance
This is my first statement to you since becoming Chairman of
your Company in December last year. For the six months ended 31st
March 2019 the total return on net assets was -12.7%. This compares
with a total return for the same period from the Company's
benchmark return, the Tokyo Stock Exchange First Section (TOPIX)
Index (in sterling terms), of -9.0%. The share price total return
also declined over the same period by 12.0% (from 458.0p to
398.0p).
The period under review has been disappointing for Japanese
equity investors as global stock markets were generally under
pressure in the latter months of 2018 reflecting, amongst other
things, concerns over a slowdown in Chinese growth and global
political uncertainties. Whilst improvements were seen in the
Company's net asset value and share price performance in the latter
months of the period this was not sufficient for the Company to
post a positive result for the six months to 31st March 2019.
Short-term underperformance has, unfortunately, impacted on the
longer term performance; however, the Company's long-term
performance continues to be strong, with outperformance against the
benchmark index over 3, 5, and 10 years of 4.5%, 28.6% and 92.5%
respectively.
I am pleased to report, however that the net asset value has
increased since the half year end by 3.2% as at 16th May 2019,
compared to the benchmark index decline of 0.9%, over the same
period, and the share price has risen by 6.0%.
The Investment Managers' Report below reviews the market and
provides more detail on performance and the stocks in which the
Company is invested. In late 2018 the Board agreed that the
Investment Manager could hold investments up to 7.5% (previously
5%) in excess of the benchmark weighting, a level that is in line
with many of the Manager's other portfolios. The Investment
Managers' report below highlights how this increased flexibility
has benefited the running of the portfolio.
Named Investment Manager
The Board is delighted to report that Miyako Urabe will join
Nicholas Weindling as Investment Manager, with effect from 22nd May
2019. She has been involved in working on the portfolio for many
years and we welcome her to the team. Shoichi Mizusawa is stepping
down as investment manager with effect from 22nd May 2019. He will
remain as Head of Equities in Tokyo and we thank him for the
support he has provided to the Board.
Gearing
The Board of Directors believes that gearing can be beneficial
to performance and sets the overall strategic gearing policy and
guidelines and reviews these at each Board meeting. The Investment
Manager then manages the gearing within the agreed levels. The
Investment Managers' permitted gearing limit is within the range of
5% net cash to 20% geared in normal market conditions. During the
period gearing ranged from 9.3% to 16.7%.
Revenue and Dividends
Dividend payments from Japanese companies are unpredictable and
dividends paid to the Company's shareholders in past years should
not be taken as a guide to future payments. For the year ended 30th
September 2018, we paid a dividend of 5.0p per share, reflecting
the available revenue for distribution. Consistent with previous
years the Company will not be declaring an interim dividend.
Discount Management/share repurchases
The Board has guidelines in place with regard to the management
of any discount/premium that may develop between the Company's
share price and its net asset value per share and to enhance
returns to shareholders. Over the period the share price discount
ranged from 4.4% to 12.8%. The Company did not repurchase any
shares during the six month period.
The Board
Andrew Fleming retired as Chairman at the Annual General Meeting
in December; I would like again to thank him for his significant
contribution to the Company over the years. At that meeting, we
welcomed Sally Macdonald as a new Director. Sally has a wealth of
experience in investment management in the Asian region and is an
excellent addition to the Board.
The Board's annual evaluation concluded that the Board retains
the various skills and experience it needs and that it works well
together. The Board's retirement schedule suggests that we would
not currently anticipate any Board changes until 2022. However, the
Board attaches great importance to the principles on diversity in
the Hampton-Alexander Review and plans to be in full conformity
with its recommendations.
Outlook
Concerns over a trade war between the United States and China
continue to overshadow equity markets and there are mixed
indicators from global economic data. However, the stimulus coming
from China should help to support growth in Asia and lead to a
recovery in global exports. With the prospect of a pickup in growth
in Asia, the outlook for the Japanese economy should also be
positive.
Against this background I continue to believe that the
investment strategy of JPMorgan Japanese Investment Trust plc
remains attractive.
Christopher Samuel
Chairman
22nd May 2019
INVESTMENT MANAGERS' REPORT
Performance
Firstly, I would like to welcome Miyako Urabe to the team as a
named investment manager. She has been involved in working on the
portfolio for many years. Turning to the period under review, in
the six months to 31st March 2019 the Company produced a total
return to shareholders of -12.0% and a total return on net assets
of -12.7%. These compare with a total return of -9.0% from the
Company's benchmark index, the TOPIX Index, in sterling terms.
Since the half year end the net asset value has increased by 3.2%
as at 16th May 2019, compared to the benchmark index decline of
0.9% over the same period.
Over the last three and five years to 31st March 2019 the
Company has returned 44.4% and 100.9% respectively versus 39.9% and
72.3% for the benchmark. The average level of gearing over the
period was 11.7%, which detracted from returns in the falling
market.
Investment Philosophy and Process
Our investment approach emphasises individual stock selection to
build a portfolio of quality growth stocks with strong future
growth prospects. This means that, within some broad portfolio risk
limits, the Company's portfolio is likely to differ materially from
the benchmark index as we will avoid companies and sectors that
face structural issues even if they are a large constituent of the
benchmark index.
The opportunity to find attractive opportunities is assisted by
the fact that the Japanese market is under-researched when compared
with other developed equity markets. With well over 50% of the
constituents of the Company's benchmark index being covered by no
more than one provider of broker research, there are significant
opportunities to uncover hidden sources of return from Japanese
equities.
Portfolio Themes
In building the Company's investment portfolio we have
identified several key themes that underlie much of our stock
selection. We believe that these themes, which we have used in
stock selection for over five years, are long-term resilient
sources of return for Japanese companies. The extent to which an
individual company is a beneficiary of one or more of these themes
adds to the attractions of the company. Background information on
each theme is set out in the Company's Annual Report and Financial
Statements. As at 31st March 2019 the portfolio breakdown by theme
was as follows:
Investment Performance
The themes to which the portfolio is exposed have not changed
during the review period. The financial characteristics of the
portfolio are also unchanged; balance sheets and cash flows
continue to be stronger, earnings growth faster and return on
equity higher than the market as a whole. For example, as at 31st
March 2019 the holdings in the portfolio generated an average
return on equity of almost 17% compared to the benchmark return on
equity of close to 12%. The portfolio valuation, as measured by the
price-earnings ratio, is higher than the market average but we
believe the strong long-term growth prospects of the companies we
own more than justifies this.
We also have a bias to mid and smaller sized companies
reflecting the fact that coverage by analysts is poor in this part
of the market, providing us with the opportunity to identify
investments overlooked by the broader market. These companies also
tend to have more focused business models. Investors should expect
to see these characteristics in the portfolio over the economic
cycle.
We made a number of changes to the portfolio and reduced the
gearing level from 14.7% at the end of September to 10.3% at the
end of March, reflecting the change in our view on the long-term
outlook for a number of portfolio companies. The largest new
purchases were Fast Retailing and Oriental Land and we made a
significant addition to Pan Pacific. Fast Retailing (Investment
Theme - Japan Brand) is the operator of UNIQLO stores. It is
expanding rapidly outside of Japan, with overseas sales accounting
for more than 50% of total sales, and online. At the same time the
company has significantly improved efficiency, most recently
through a new large distribution center in Tokyo that only requires
10% of the people to operate it compared to the previous facility.
Oriental Land (Investment Theme - Japan Brand) is the operator of
Tokyo Disneyland which has an entry price half that of equivalent
parks in the United States and approximately 30 million visitors
per year. The company has yet to start using 'fast passes', which
allow customers to move to the front of queues for some rides for
an additional payment. We believe the company will start to
monetize this hugely popular asset more effectively.
The largest complete sales were Mitsubishi UFJ Financial,
Komatsu and Sony. We sold the position in Sony following Google's
announcement of its new gaming system Stadia which allows computer
games to be streamed directly without the need of a console. This
poses a significant threat to one of Sony's key businesses. We
believe that games content will continue to be valuable regardless
of which system becomes dominant and retain holdings in Nintendo,
Square Enix and Nexon as a result.
Annualised turnover for the six months to 31st March 2019 was
just over 20%, down from 30% over the same period last year.
Commenting on the Trust's five largest holdings:
-- Keyence (Investment Theme - Automation) continues to be the
Trust's largest position. It manufactures sensors used in factory
production lines and is well-diversified in terms of geography and
end-markets. It makes an operating margin of over 55% which is far
ahead of its competitors and one of the highest operating margins
of any manufacturing company anywhere in the world. It also
generates consistently strong free cash flow and has a very strong
balance sheet. In short, it exhibits many of the characteristics we
look for in our investments. Its good performance was driven by
strong earnings which have proven to be more robust than its peers
in the recent economic slowdown.
Due to strong share price performance, the holding exceeded the
previous 5% overweight benchmark limit during the six month period.
In the past we would have had to reduce the holding. However, we
are now able to maintain the holding up to a maximum 7.5%
overweight position compared to the benchmark weighting.
-- Recruit (Investment Theme - Internet) operates a number of
media businesses in Japan all of which are market leaders including
those in the real estate, restaurant, bridal and used-car adverts
sectors. The investment case centres on its global number one jobs
website 'indeed'. Monetisation of this asset, which receives over
250 million visits per month, remains at an early stage. As such,
we believe it has strong future earnings growth potential.
-- Shiseido (Investment Theme - Japan Brand) is a cosmetics
manufacturer. The company's operating profit margin is lower than
global peers at c.10% versus over 15% for domestic and
international competitors. However, this is an improvement on the
5% reported last year. We believe that new management is turning
the company around and has a strong focus on profitability.
Furthermore, Japanese cosmetics companies have a significant
opportunity to grow in China where per capita usage of these
products is still well below developed markets.
-- Hikari Tsushin (Investment Theme - Improving Corporate
Governance) has a variety of businesses generating strong recurring
revenues and free cash flow from SMEs. ePark is a reservation
system for online bookings at dental and medical surgeries. To
date, approximately 8,000 of the 70,000 dental surgeries in Japan
have adopted the system, paying a monthly fee. The company is
prioritizing shareholder returns, buying back 20% of its shares
over the last 10 years.
-- M3 (Investment Theme - Healthcare) operates the number one
website used by doctors in Japan and the UK (amongst other
countries). Its use is growing rapidly in China and we expect the
company to expand both its geographic reach and the range of
services it provides. The core business enables pharmaceutical
companies to reduce their marketing expenses by promoting their
products online. Governments are putting increasing pressure on
pharmaceutical companies to reduce drug prices as they try to
control healthcare expenditure. Any reduction in marketing expenses
will therefore ease pressure on research and development costs.
During the review period, the company prioritised up-front
investment resulting in lower short-term profits and negatively
impacting share price performance. However we remain holders as we
believe in the company's strategy to maximise the long-term
opportunity.
Relative performance was strong in the first nine months of 2018
calendar year. However, during the final quarter, being the first
three months of the Company's financial year, performance was very
poor. During this period both growth stocks, which tend to trade on
higher short-term valuations, and stocks which had previously
performed well following good results, were weak. The Company has
high exposure to stocks in both of these categories as we believe
that the outstanding long-term growth profiles of the companies we
own more than justify their valuations. We do not have a short term
trading approach and believe that a recent relative increase in
share price is insufficient reason to sell a stock - there are
several examples of stocks we hold that have increased several fold
during our ownership.
The market volatility arose largely as a result of uncertainty
around rising interest rates in the United States, concerns over
global economic growth and a potential trade war between China and
the US. In February and March the Company's performance
significantly improved as concern over rising interest rates
dissipated. In this environment investors sought out high quality
companies with strong balance sheets and free cash flows with
growth that does not depend on the global economic cycle. These are
exactly the types of stocks the Company is exposed to. We continue
to have confidence in the long-term attraction of these
companies.
During the six month period the top contributing stocks were Pan
Pacific Holdings, Keyence (discussed above), GMO Payment Gateway,
Nexon and Ci:Z Holdings.
-- Pan Pacific Holdings (Investment Theme - stock specific)
(formerly named Don Quijote) operates a chain of discount stores.
It is a major disruptor in the Japanese retail industry with a low
cost structure that allows it consistently to beat incumbents. It
adjusts merchandise depending on the prevailing economic trend and
has proved itself in both inflationary and deflationary
environments. The company is increasingly successful in new areas
such as food and products for tourists. For example the percentage
of sales to tourists has increased from roughly 1% five years ago
to over 10% now. During the period the company announced its
acquisition of competitor, Uny. Stores that have completed their
conversion into Don Quijote stores have seen sales rise almost
two-fold. The company has a strong track record on such
acquisitions, having bought Nagasakiya in 2007.
-- GMO Payment Gateway (Investment Theme - Internet) provides
transaction services for cashless payments such as those used in
eCommerce. 80% of transactions in Japan are still carried out in
cash, which is high by global standards. In the United Kingdom, for
example, over 55% transactions are now cashless. There is a strong
push from the government to increase the percentage of cashless
payments in Japan and GMO Payment Gateway is well positioned to
benefit from this trend. It performed well due to continuing high
rates of growth with sales and operating profits both growing in
excess of 30%.
-- Nexon (Investment Theme - Internet) is a computer games
company that aims to have games which generate steady profits and
long-term cash flows. Its Dungeons and Fighters title has been one
of the most popular games in China for many years. The shares
performed strongly following the announcement by major shareholder
NXC of its intention to sell its 50% holding in Nexon. The market
responded positively to the news as a number of the potential
acquirers would be able to assist with Nexon's games
distribution.
-- Ci:Z Holdings (Investment Theme - Japanese Brand) is a
skincare company which we believe has strong growth potential
outside Japan. Johnson & Johnson acquired the company at a
significant premium. It is highly unusual to see a Japanese company
acquired by a foreign corporate but as attitudes to corporate
governance and shareholder value slowly change in Japan it is
possible that we see more such deals.
During the six month period the top detracting stocks were M3,
Cyber Agent, Zozo, Pigeon and Monotaro. It is notable that four of
these five stocks are online businesses. There was little change in
long-term outlooks; however their share prices fell significantly
during October's sell-off in growth stocks. Further details are set
out either in the description of our largest positions earlier in
this report, or below. We remain holders of these positions as we
continue to believe in the long term investment case for each
stock.
-- Cyber Agent (Investment theme - Internet) is Japan's number
one online advertising agency. It also operates games for mobile
phones and is investing in online television. The penetration of
online advertising in Japan is much lower than other developed
markets and CyberAgent continues to take share. The shares
struggled following the company's downward revision to its earnings
projection due to poor sales in its mobile game business.
-- Zozo (Investment Theme - Internet) (formerly called Start
Today) sells clothing online. The penetration of clothes bought on
the internet in Japan is low relative to other developed markets
and, as such, the growth outlook is strong over the next few years.
However, the share price fell because recent business initiatives
have not been as successful as anticipated. The company has a good
record of responding to such challenges. We believe that the
long-term outlook is unchanged after the reporting period the
company announced the closure of its international business.
-- Pigeon (Investment Theme - Japan Brand) is a manufacturer of
baby goods with c.75% of the Japanese baby bottle market. It is
expanding rapidly across the Asian region. The shares have
performed strongly over several years and were caught in the
general market weakening rather than there being a particular
reason for the underperformance.
-- MonotaRO (Investment Theme - Internet) is an online supplier
of industrial parts and products to small and medium size
enterprises. Many SMEs still order via phone or fax and the
opportunity is large. The company is investing for future growth
which is suppressing short-term profit. However, in the long-term
such investment is positive and the outlook is unchanged.
Investment outlook
The Japanese market is more cyclical than other developed
markets and is impacted by global economic developments, both
positively and negatively. Currently the concerns about a potential
trade war between the United States and China remain ongoing and
there is somewhat mixed global economic data, particularly in
manufactured goods. However, the recent stimulus measures in China
should prove favourable.
Your company, however, focuses on individual stocks rather than
attempting to predict global economic growth. The companies we have
invested in have strong structural growth outlooks, competitive
positions and balance sheets and we believe they will perform well
in the long-term view regardless of the twists and turns of the
wider global economy. Their competitive positions and balance
sheets are strong enough to withstand such issues.
Nicholas Weindling
Shoichi Mizusawa
Investment Managers
22nd May 2019
Interim Management Report
The Company is required to make the following disclosures in its
half year report.
Principal Risks and Uncertainties
The principal risks and uncertainties faced by the Company fall
into the following broad categories: investment underperformance
and strategy; market and currency; political, economic and
governance; loss of investment team or portfolio manager; discount;
change of corporate control of the Manager; accounting, legal and
regulatory; corporate governance and shareholder relations;
operational, cyber crime and financial. Information on each of
these areas is given in the Strategic Report within the Annual
Report and Financial Statements for the year ended 30th September
2018.
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 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
twelve 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 accounts.
Directors' Responsibilities
The Board of Directors confirms that, to the best of its
knowledge:
(i) the condensed set of financial statements contained within
the interim financial report has been prepared in accordance with
FRS 104 'Interim Financial Reporting' and gives a true and fair
view of the state of the affairs of the Company and of the assets,
liabilities, financial position and net return of the Company, as
at 31st March 2019, as required by the UK Listing Authority
Disclosure Guidance and Transparency Rule ('DTR') 4.2.4R; and
(ii) the interim management report includes a fair review of the
information required by DTR 4.2.7R and DTR 4.2.8R.
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
Christopher Samuel
Chairman
22nd May 2019
statement of comprehensive income
for the six months ended 31st March 2019
(Unaudited) (Unaudited) (Audited)
Six months ended Six months ended Year ended
31st March 2019 31st March 2018 30th September 2018
Revenue Capital Total Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------- -------- ---------- ----------- -------- -------- -------- -------- -------- ---------
(Losses)/gains on
investments held at
fair value through
profit or loss - (107,833) (107,833) - 98,795 98,795 - 179,515 179,515
Net foreign currency
losses - (3,473) (3,473) - (1,626) (1,626) - (2,915) (2,915)
Income from
investments 5,747 - 5,747 6,231 - 6,231 11,665 - 11,665
Other interest
receivable and
similar income 364 - 364 36 - 36 293 - 293
---------------------- -------- ---------- ----------- -------- -------- -------- -------- -------- ---------
Gross return/(loss) 6,111 (111,306) (105,195) 6,267 97,169 103,436 11,958 176,600 188,558
Management fee (426) (1,704) (2,130) (439) (1,755) (2,194) (905) (3,622) (4,527)
Other administrative
expenses (305) - (305) (322) - (322) (690) - (690)
---------------------- -------- ---------- ----------- -------- -------- -------- -------- -------- ---------
Net return on
ordinary activities
before finance costs
and taxation 5,380 (113,010) (107,630) 5,506 95,414 100,920 10,363 172,978 183,341
Finance costs (141) (562) (703) (112) (448) (560) (282) (1,127) (1,409)
---------------------- -------- ---------- ----------- -------- -------- -------- -------- -------- ---------
Net return on
ordinary activities
before taxation 5,239 (113,572) (108,333) 5,394 94,966 100,360 10,081 171,851 181,932
Taxation (575) - (575) (624) - (624) (1,168) - (1,168)
---------------------- -------- ---------- ----------- -------- -------- -------- -------- -------- ---------
Net return on
ordinary activities
after taxation 4,664 (113,572) (108,908) 4,770 94,966 99,736 8,913 171,851 180,764
---------------------- -------- ---------- ----------- -------- -------- -------- -------- -------- ---------
Return/(loss) per
share (note 3) 2.89p (70.43)p (67.54)p 2.96p 58.89p 61.85p 5.53p 106.58p 112.11p
statement of changes in equity
for the six months ended 31st March 2019
Called up Capital
share redemption Other Capital Revenue
capital reserve reserve reserves reserve(1) Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------------------- ---------- ----------- -------- ---------- ----------- ----------
Six months ended 31st March 2019 (Unaudited)
At 30th September 2018 40,312 8,650 166,791 623,207 12,580 851,540
Net return on ordinary activities - - - (113,572) 4,664 (108,908)
Dividend paid in the period (note 4) - - - - (8,062) (8,062)
---------------------------------------------- ---------- ----------- -------- ---------- ----------- ----------
At 31st March 2019 40,312 8,650 166,791 509,635 9,182 734,570
---------------------------------------------- ---------- ----------- -------- ---------- ----------- ----------
Six months ended 31st March 2018 (Unaudited)
At 30th September 2017 40,312 8,650 166,791 451,356 11,729 678,838
Net return on ordinary activities - - - 94,966 4,770 99,736
Dividend paid in the period (note 4) - - - - (8,062) (8,062)
---------------------------------------------- ---------- ----------- -------- ---------- ----------- ----------
At 31st March 2018 40,312 8,650 166,791 546,322 8,437 770,512
---------------------------------------------- ---------- ----------- -------- ---------- ----------- ----------
Year ended 30th September 2018 (Audited)
At 30th September 2017 40,312 8,650 166,791 451,356 11,729 678,838
Net return on ordinary activities - - - 171,851 8,913 180,764
Dividend paid in the year (note 4) - - - - (8,062) (8,062)
---------------------------------------------- ---------- ----------- -------- ---------- ----------- ----------
At 30th September 2018 40,312 8,650 166,791 623,207 12,580 851,540
---------------------------------------------- ---------- ----------- -------- ---------- ----------- ----------
1. This reserve forms the distributable reserve of the Company
and may be used to fund distributions to investors via dividend
payments.
statement of financial position
at 31st March 2019
(Unaudited) (Unaudited) (Audited)
31st March 2019 31st March 2018 30th September 2018
GBP'000 GBP'000 GBP'000
--------------------------------------------------------- ---------------- ---------------- --------------------
Fixed assets
Investments held at fair value through profit or loss 810,064 895,681 976,724
--------------------------------------------------------- ---------------- ---------------- --------------------
Current assets
Debtors 3,417 4,430 7,001
Cash and cash equivalents 30,182 6,884 7,278
--------------------------------------------------------- ---------------- ---------------- --------------------
33,599 11,314 14,279
Creditors: amounts falling due within one year (19,485) (2,423) (4,951)
--------------------------------------------------------- ---------------- ---------------- --------------------
Net current assets 14,114 8,891 9,328
--------------------------------------------------------- ---------------- ---------------- --------------------
Total assets less current liabilities 824,178 904,572 986,052
--------------------------------------------------------- ---------------- ---------------- --------------------
Creditors: amounts falling due after more than one year (89,608) (134,060) (134,512)
--------------------------------------------------------- ---------------- ---------------- --------------------
Net assets 734,570 770,512 851,540
--------------------------------------------------------- ---------------- ---------------- --------------------
Capital and reserves
Called up share capital 40,312 40,312 40,312
Capital redemption reserve 8,650 8,650 8,650
Other reserve 166,791 166,791 166,791
Capital reserves 509,635 546,322 623,207
Revenue reserve 9,182 8,437 12,580
--------------------------------------------------------- ---------------- ---------------- --------------------
Total shareholders' funds 734,570 770,512 851,540
--------------------------------------------------------- ---------------- ---------------- --------------------
Net asset value per share (note 5) 455.6p 477.8p 528.1p
statement of cash flows
for the six months ended 31st March 2019
(Unaudited) (Unaudited) (Audited)
31st March 2019 31st March 2018 30th September 2018
GBP'000 GBP'000 GBP'000
------------------------------------------------------------ ---------------- ---------------- --------------------
Net cash outflow from operations before dividends and
interest (1,971) (2,397) (4,461)
Dividends received 5,209 5,056 10,902
Interest paid (723) (579) (1,262)
------------------------------------------------------------ ---------------- ---------------- --------------------
Net cash inflow from operating activities 2,515 2,080 5,179
------------------------------------------------------------ ---------------- ---------------- --------------------
Purchases of investments (86,613) (161,104) (404,862)
Sales of investments 149,709 137,451 379,693
Settlement of foreign currency contracts (63) 12 15
------------------------------------------------------------ ---------------- ---------------- --------------------
Net cash inflow/(outflow) from investing activities 63,033 (23,641) (25,154)
------------------------------------------------------------ ---------------- ---------------- --------------------
Dividends paid (8,062) (8,062) (8,062)
Drawdown of bank loan - 32,989 32,990
Drawdown of senior secured loan note - - 88,967
Repayment of bank loan (34,512) - (90,235)
------------------------------------------------------------ ---------------- ---------------- --------------------
Net cash (outflow)/inflow from financing activities (42,574) 24,927 23,660
------------------------------------------------------------ ---------------- ---------------- --------------------
Increase in cash and cash equivalents 22,974 3,366 3,685
------------------------------------------------------------ ---------------- ---------------- --------------------
Cash and cash equivalents at start of period 7,278 3,551 3,551
Exchange movements (70) (33) 42
Cash and cash equivalents at end of period 30,182 6,884 7,278
------------------------------------------------------------ ---------------- ---------------- --------------------
Increase in cash and cash equivalents 22,974 3,366 3,685
------------------------------------------------------------ ---------------- ---------------- --------------------
Cash and cash equivalents consist of:
Cash and short term deposits 30,182 6,884 7,278
------------------------------------------------------------ ---------------- ---------------- --------------------
Notes to the financial statements
for the six months ended 31st March 2019
1. Financial statements
The information contained within the financial statements in
this half year report has not been audited or reviewed by the
Company's auditors.
The figures and financial information for the year ended 30th
September 2018 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 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
November 2014 and updated in February 2018.
FRS 104, 'Interim Financial Reporting', issued by the Financial
Reporting Council ('FRC') in March 2015 has been applied in
preparing this condensed set of financial statements for the six
months ended 31st March 2019.
All of the Company's operations are of a continuing nature.
The accounting policies applied to this condensed set of
financial statements are consistent with those applied in the
financial statements for the year ended 30th September 2018.
3. Return/(loss) per share
(Unaudited) (Unaudited) (Audited)
Six months ended Six months ended Year ended
31st March 2019 31st March 2018 30th September 2018
GBP'000 GBP'000 GBP'000
---------------------------------------------------- ----------------- ----------------- --------------------
Return/(loss) per share is based on the following:
Revenue return 4,664 4,770 8,913
Capital (loss)/return (113,572) 94,966 171,851
---------------------------------------------------- ----------------- ----------------- --------------------
Total (loss)/return (108,908) 99,736 180,764
---------------------------------------------------- ----------------- ----------------- --------------------
Weighted average number of shares in issue 161,248,078 161,248,078 161,248,078
Revenue return per share 2.89p 2.96p 5.53p
Capital (loss)/return per share (70.43)p 58.89p 106.58p
---------------------------------------------------- ----------------- ----------------- --------------------
Total (loss)/return per share (67.54)p 61.85p 112.11p
---------------------------------------------------- ----------------- ----------------- --------------------
4. Dividends paid
(Unaudited) (Unaudited) (Audited)
Six months ended Six months ended Year ended
31st March 2019 31st March 2018 30th September 2018
GBP'000 GBP'000 GBP'000
------------------------------------------------------- ----------------- ----------------- --------------------
2018 final dividend paid of 5.0p (2017: 5.0p) per
share 8,062 8,062 8,062
------------------------------------------------------- ----------------- ----------------- --------------------
All dividends paid in the period have been funded from the
revenue reserve.
No interim dividend has been declared in respect of the six
months ended 31st March 2019 (2018: nil).
5. Net asset value per share
(Unaudited) (Unaudited) (Audited)
Six months ended Six months ended Year ended
31st March 2019 31st March 2018 30th September 2018
Net assets (GBP'000) 734,570 770,512 851,540
Number of shares in issue 161,248,078 161,248,078 161,248,078
--------------------------- ----------------- ----------------- --------------------
Net asset value per share 455.6p 477.8p 528.1p
--------------------------- ----------------- ----------------- --------------------
22nd May 2019
For further information, please contact:
Faith Pengelly
For and on behalf of
JPMorgan Funds Limited, Secretary 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 FUNDS LIMITED
ENDS
A copy of the half year will be submitted to the National
Storage Mechanism and will shortly be available for inspection at
www.morningstar.co.uk/uk/NSM
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR BUGDUSSDBGCD
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