TIDMJFF
RNS Number : 7140M
JPMorgan Eur Fldglng Inv Trust PLC
28 May 2010
STOCK EXCHANGE ANNOUNCEMENT
JPMORGAN EUROPEAN FLEDGELING INVESTMENT TRUST PLC
ANNOUNCEMENT OF FINAL RESULTS
The Directors of JPMorgan European Fledgeling Investment Trust plc announce the
Company's results for the year ended 31st March 2010.
Chairman's Statement
Performance
The year to 31st March 2010 was just as volatile as the previous financial year
but there was, thankfully, a considerably more positive outcome for equity
investors. In the year to 31st March 2010, the Company's total return on net
assets (i.e. with net income reinvested) was +57.7%, which compares with a
return of +75.2% on the same basis from the Company's benchmark, the HSBC
Smaller European Companies (ex UK) Total Return Index in sterling terms. Whilst
it is disappointing to have underperformed the benchmark index, the significant
positive return is welcome following such a turbulent period in financial
markets.
The underperformance occurred principally in the first half of the Company's
financial year, as markets rallied strongly but to a lesser extent in companies
exhibiting the style factors that our Investment Managers seek. More details are
given in the Investment Managers' Report. Performance attribution analysis shows
that stock selection was negative over the year, but that the use of gearing in
a rising market was positive and offset this to some extent.
Equity markets began to normalise in the second half of the year and it is
encouraging that the Company outperformed the benchmark over both three and six
months to 31st March 2010. Longer term NAV performance remains strong; the
Company has outperformed the benchmark over three years. Over five and ten
years, it was first and second in its peer group respectively.
The discount of the Company's share price to net asset value (based on the
assumption that the shares held in Treasury had been reissued at 31st March 2010
in accordance with the Board's policy on the reissuance of Treasury shares)
narrowed a little over the year from 19.5% to 18.7%. This resulted in a total
return to shareholders of +59.8%.
Revenue and Dividends
Net revenue return for the year amounted to GBP2.2 million and there is now a
positive balance on the Company's Revenue Reserve. As a result, under investment
trust rules, the Company is required to pay a dividend. Subject to shareholder
approval at the forthcoming Annual General Meeting, a dividend of 3.0 pence per
share will be paid on 15th July 2010 to shareholders on the register at the
close of business on 18th June 2010. I would remind shareholders that the
Company's objective is to achieve capital growth rather than income and so
dividends may not arise every year.
Share Buybacks and Treasury Shares
Consistent with most investment trust companies in the European sector, the
discount to net asset value at which the Company's shares trade has remained
stubbornly wide over the year, averaging 17.5%. The Board has continued to use
its share buyback authority to attempt to manage the volatility and absolute
level of the discount. During the year, the number of shares bought back
totalled 1,263,547, representing 2.7% of the shares in issue at the beginning of
the financial year. Those shares were bought into Treasury and, consistent with
previous practice, on 29th March 2010 a total of 1,628,670 shares were
cancelled, having been held in Treasury for over a year. No shares were reissued
from Treasury during the year.
The Board has reviewed its share buyback and Treasury share policies. It is
cognisant of the widened discount on the Company's shares, despite more stable
equity market conditions, and shareholders will have noted that the Company has
been more actively buying in shares in recent weeks.
At the previous five Annual General Meetings shareholders have approved a
resolution to enable the Company to reissue shares from Treasury at a discount
to net asset value. Despite the fact that no shares were reissued from Treasury
in the year under review, the Board continues to believe that there are benefits
in having the ability to reissue, rather than cancel, shares bought in the
market. Its use can improve liquidity in the Company's shares, help manage any
imbalance between the supply and demand, reduce the volatility and absolute
levels of the discount and enhance the net asset value by reissuing shares at a
narrower discount than that at which they were purchased.
The Board will seek renewal of the authority for the use of Treasury shares at
the forthcoming Annual General Meeting as it sees this as a useful tool to add
value for shareholders should market conditions improve. It is important to note
that, as previously, the Board will maintain its policy of restricting the
Company's ability to reissue Treasury shares, by imposing a strict limit to the
dilution associated with the reissue at a discount to a maximum of 0.5% of net
asset value in any one year.
Board Evaluation
The Nomination Committee carried out its annual evaluation of the Board, its
Committees, the individual Directors and the Chairman earlier this year. The
Board takes this review seriously and views it as an effective means of
evaluating the continuing efficacy of the Board. The Company's Articles of
Association require that all Directors who held office at the time of the two
preceding AGMs and did not retire by rotation at either of them must retire at
the next AGM. As all of the Directors stood for re-election in either 2008 or
2009, there is no requirement under the Articles for a Director to stand for
re-election this year.
However, having served as a Director for more than nine years, I must stand for
annual re-election, in accordance with corporate governance best practice. In my
absence, the Nomination Committee assessed my performance and determined that I
should continue as Chairman. A resolution proposing my re-election will
therefore be put to the forthcoming AGM.
The Committee also agreed that a new director would be recruited in the near
future to enable the Board to be refreshed over the coming two to three years.
An external agency has been engaged to conduct the search for a new director.
Manager Evaluation
During the year, the Board engaged an independent third party, Trust Associates,
to conduct a review of the Company's management fee arrangements. Following that
review, the Board concluded that it was satisfied that the current management
fee arrangement was competitive. It will review the terms of the management fee
arrangement at least every three years.
The Board also carried out a formal review of the Manager, JPMorgan Asset
Management (UK) Limited ('JPMAM') during the year. This covered the investment
management, company secretarial, administrative and marketing services provided
to the Company by JPMAM and took into account their investment performance
record, management processes, investment style, resources and risk control
mechanisms. The Board is satisfied with the performance of the Manager and
concluded that its continued appointment on the existing terms is very much in
the interests of shareholders as a whole.
Corporate Governance
The Company operates in accordance with corporate governance best practice and
the Board is committed to the highest standards of corporate governance as
applicable to investment trust companies. Comprehensive information can be found
in the Corporate Governance section of the Annual Report to be published
shortly.
Company Name
At the forthcoming AGM, a special resolution will be put to shareholders
proposing that the Company's name be changed to 'JPMorgan European Smaller
Companies Trust plc'. The Board believes that this more accurately reflects the
Company's investment objective and follows research conducted amongst the
Company's shareholders and other market participants.
Annual General Meeting
The Company's AGM will be held at The Armourers' Hall, 81 Coleman Street, London
EC2R 5BJ on Thursday 8th July 2010 at 12.00 noon.
Outlook
The Investment Managers set out their views on the investment outlook in their
report. They see a reasonable prospect of continued growth in both the earnings
and ratings of smaller European companies.
The Board notes that there remain significant uncertainties in the wider
European economic outlook due to the high level of indebtedness amongst some
European countries. At present, the markets await more clarity about the
prospects for longer term debt reduction from eurozone countries and the impact
this may have on the European economies. However providing the debt squeeze does
not extend further into the corporate sector, there are underlying favourable
conditions for many companies in the form of low interest rates and a weak
currency.
The substantial rise in the European equity markets over the past year combined
with the uncertain economic environment suggests more limited prospects for
further increases this year and the Board is supportive of the Investment
Managers' cautious stance.
Elisabeth Airey
Chairman
28th May 2010
Investment Managers' Report
Investment Process
The objective of the Company is to achieve capital growth from a portfolio of
quoted smaller companies in Europe, excluding the United Kingdom. The investment
universe is defined at the time of purchase by the countries and market
capitalisation range of the constituents of the benchmark index which, at the
end of March 2010, consisted of 1,000 companies with a market value of between
GBP59 million and GBP2.5 billion across 15 countries. The investment process is
driven by bottom-up stock selection focusing on a combination of growth
companies with strong operational momentum and value companies with a catalyst
for re-rating. The large universe of potential investments is screened using a
proprietary multi-factor model to the results of which we apply fundamental
analysis. The portfolio is constructed within a framework where risk is managed
in terms of investment style factors relative to the benchmark index.
Investments are sold when there is a fundamental negative change in business
prospects, the valuation is regarded as excessive or the market capitalisation
has outgrown significantly the benchmark index. The policy is not to use
derivatives to hedge the currency exposure of the portfolio's assets. The Board
has maintained the liquidity range of 20% cash to 20% gearing within which the
Investment Managers may operate.
Market Review
Following two years of steep declines in European equities, during which the
large company MSCI Europe Total Return Index declined by almost 60% from peak to
trough, the Company's last financial year witnessed one of the sharpest market
recoveries. From the end of the first quarter of 2009 the negative impact of the
credit crisis on stockmarkets began to abate. There was renewed belief that
concerted global fiscal stimulus was sufficiently robust and monetary policy
sufficiently relaxed to ensure that the financial system would continue to
function. Perhaps unusually, the momentum of growth in emerging markets, such as
China and India, continued unabated and provided a boost to exports from
otherwise faltering developed economies.
The last year has been a classic where markets have climbed a wall of fear with
concerns of, variously, double-dip recession, inflation, deflation, invasive
bank regulation, a Euro sovereign debt crisis and even a volcanic eruption being
overcome as share prices recovered. An increased appetite for risk was equally
reflected in a collapse in the 'VIX' Index (a measure of volatility) and in the
spread of corporate bond yields over government debt.
Meanwhile, companies reacted with unprecedented speed to adjust costs and
working capital in their businesses to the now significantly lower levels of
demand. Combined with improving economic sentiment, this led to a marked
improvement in analysts' expectations of corporate earnings growth, with the
rate of downgrades moderating throughout the year to the extent that, by the
first quarter of 2010, analysts were in the unusual position of, on average,
upgrading their profit forecasts for the next twelve months.
Over the year to the end of March 2010 the large company MSCI Europe (ex UK)
Index returned +47.4% in sterling. Increased appetite for risk led to sharp
outperformance by our benchmark, the HSBC Smaller European Companies (ex UK)
Total Return Index, which returned +75.2%.
Portfolio Performance
The return on net assets was 57.7% over the year, clearly lagging the
performance of the benchmark HSBC Index but significantly outpacing the large
company MSCI Index. The decision to maintain a geared position in a rising
market throughout the year was one of the key positive contributors to
performance. At a stock level, the top contributors included Swedish broadcaster
Modern Times Group which rose by 200% as advertising began to recover and pay TV
subscribers continued to grow, Norwegian provider of seismic surveys to the oil
industry TGS Nopec, which rose by
190% as the oil price recovered, and Dutch temporary employment service provider
Randstad, which rose by 240% on an improved outlook for demand.
The underlying reason for the shortfall in the portfolio's performance relative
to the benchmark HSBC Index lies in the exceptionally unusual behaviour of style
factors in European equities last year. Investing in cheap companies with strong
earnings and price momentum relative to the market typically leads to superior
performance over the long term.
During 2009, especially at the second quarter turning point in the market, it
was those companies whose share prices had previously underperformed the most
and which, at the time, had the poorest relative earnings revisions, which
performed the best and by some margin. This was true even amongst the cheapest
stocks in the market to the extent that the portfolio was not exposed to many of
the market's best performers over the year. Although this is not unusual at a
turning point in the market, the magnitude and speed with which such companies
outperformed was exceptional. Whilst, with a geared position, the portfolio was
positioned for a market recovery, in the initial phase we did not have the
stocks best placed to benefit from it.
The performance of style factors in European equities began to normalise during
the second half of the Company's year and, with a more growth biased portfolio,
the net asset value increased by 9.3%, outpacing the 7.7% return of the
benchmark HSBC Index in the six months to 31st March 2010.
Portfolio Positioning
As the outlook for growth improved, we found an increasing number of attractive
investment opportunities and the total number of holdings in the portfolio has
increased from 99 at the end of 2009 to 125 at 31st March 2010. A positive
market environment can favour the relative performance of micro-cap companies
and we increased the portfolio's weighting in micro-cap companies from 17% to
20% over the course of the financial year. Gearing was maintained at a level
around 10% throughout the twelve months and was brought back to almost zero
towards the financial year end as concerns over Euro sovereign debt became more
profound.
The diverse Support Services sector remained one of the portfolio's largest
active positions following strong stock performance and with the addition of
such holdings as Dutch dredging services business Boskalis Westminster and Swiss
airline caterer Gategroup. We moved to an overweight position in the Retail
sector following the acquisition of holdings in Belgian car rental and
distribution and auto glass repair business D'Ieteren, Swiss duty free operator
Dufry and Italian on-line premium clothing retailer Yoox. With a more positive
view of economic recovery, Industrial Engineering moved from being the largest
underweight sector to one of the largest overweights, with new investments in
Austrian plant engineer Andritz, German auto components and defence business
Rheinmetall, Greek refrigeration equipment producer Frigoglass and Italian
scooter manufacturer Piaggio. Our less defensive stance led to a reduction in
previously large overweight positions in the Healthcare and Pharmaceuticals
sectors where we, respectively, disposed of holdings in hearing aid producers
William Demant in Denmark and Sonova in Switzerland and Lundbeck in Denmark,
Recordati in Italy and Orion in Finland. The
large overweight in General Financials was reduced with the sale of stock
exchange operators Hellenic Exchanges in Greece and Bolsas y Mercados in Spain,
as both suffered from new entrants in the market.
Outlook
Generally, economic and corporate newsflow has exceeded expectations thus far in
2010 and, with only limited inflationary pressures, interest rates appear set to
remain at exceptionally low levels for the foreseeable future. It is looking
possible that economic growth may become self-sustaining even as the impact of
fiscal stimulus and quantitative easing abates. However, concerns over national
and corporate indebtedness may periodically unnerve markets. This was evidenced
in May by both one of the fastest rises and falls in the twenty year history of
the VIX index of volatility. A relatively weak currency, on the other hand, can
provide a welcome boost for European exporters. This is already being reflected
in order income figures for a wide range of industrial and consumer goods
companies.
Having moved from despair to hope over the last twelve months, markets are set
to enter a fulfilment phase where earnings typically grow into expanded
prospective valuations. Compared with history, equity valuations in Europe are
not expensive with a forecast PE ratio of 11.0 on forward earnings. Following
outperformance over the year, smaller companies still trade at a discount,
albeit narrower, to large companies.
We continue to seek out well managed businesses with strong market positions
where there is the potential for superior operating performance over the medium
term. Following a period of extreme volatility, we await a more obvious trend
emerging in the future direction of the market before considering redeploying
the portfolio's gearing capacity.
Jim Campbell
Francesco Conte
Investment Managers
28th May 2010
Principal Risks
With the assistance of the Manager the Board has drawn up a risk matrix, which
identifies the key risks to the Company.
These key risks fall broadly under the following categories:
- Investment and Strategy: An inappropriate investment strategy, for example
asset allocation or the level of gearing, may lead to underperformance against
the Company's benchmark index and peer companies, resulting in the Company's
shares trading on a wider discount. The Board manages these risks by
diversification of investments through its investment restrictions and
guidelines, which are monitored and reported on by the Manager. JPMAM provides
the Directors with timely and accurate management information, including
performance data and attribution analyses, revenue estimates, liquidity reports
and shareholder analyses. The Board monitors the implementation and results of
the investment process with the investment managers, who attend all Board
meetings, and review data which show statistical measures of the Company's risk
profile. The investment managers employ the Company's gearing tactically, within
a strategic range set by the Board. The Board holds a separate meeting devoted
to strategy each year.
- Market: Market risk arises from uncertainty about the future prices of the
Company's investments. It represents the potential loss that the Company might
suffer through holding investments in the face of negative market movements. The
Board considers asset allocation, stock selection and levels of gearing on a
regular basis and has set investment restrictions and guidelines, which are
monitored and reported on by JPMAM. The Board monitors the implementation and
results of the investment process with the Manager.
- Accounting, Legal and Regulatory: In order to qualify as an investment trust,
the Company must comply with Section 842 of the Income and Corporation Taxes Act
1988 ('Section 842'). Were the Company to breach Section 842, it might lose
investment trust status and, as a consequence, gains within the Company's
portfolio would be subject to Capital Gains Tax. The Section 842 qualification
criteria are continually monitored by JPMAM and the results reported to the
Board each month. The Company must also comply with the provisions of the
Companies Act 2006 and, as its shares are listed on the London Stock Exchange,
the UKLA Listing Rules. A breach of the Companies Act could result in the
Company and/or the Directors being fined or the subject of criminal proceedings.
Breach of the UKLA Listing Rules could result in the Company's shares being
suspended from listing which in turn would breach Section 842. The Board relies
on the services of its Company Secretary, JPMAM to ensure compliance with the
Companies Act and the UKLA Listing Rules.
- Corporate Governance and Shareholder Relations: Details of the Company's
compliance with Corporate Governance best practice, including information on
relations with shareholders, are set out in the Corporate Governance section of
the annual report.
- Operational: Loss of key staff by JPMAM, such as the Investment Managers,
could affect the performance of the Company. Disruption to, or failure of,
JPMAM's accounting, dealing or payments systems or the custodian's records could
prevent accurate reporting and monitoring of the Company's financial position.
Details of how the Board monitors the services provided by JPMAM and its
associates and the key elements designed to provide effective internal control
are included within the Internal Control section of the Corporate Governance
report.
- Financial: The financial risks faced by the Company include market price risk,
interest rate risk, liability risk and credit risk. Further details are
disclosed in note 20 of the Company's Report & Accounts.
Related Parties Transactions
During the 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 year.
Directors' Responsibilities
The Directors each confirm to the best of their knowledge that:
a) the financial statements have been prepared in accordance with
applicable UK accounting standards, and give a true and fair view of the assets,
liabilities, financial position and profit or loss of the Company; and
b) the Annual Report, to be published shortly, includes a fair review of
the development and performance of the business and the position of the Company,
together with a description of the principal risks and uncertainties that they
face.
For and on behalf of the Board
Elisabeth Airey
Chairman
28th May 2010
JPMorgan European Fledgeling Investment Trust plc
Audited figures for the year ended 31st March 2010
Income Statement
for the year ended 31st March
+----------------+--------+---------+---------+---------+---------+-----------+-----------+
| | | | 2010 | | | 2009 | |
+----------------+--------+---------+---------+---------+---------+-----------+-----------+
| | | Revenue | Capital | Total | Revenue | Capital | Total |
+----------------+--------+---------+---------+---------+---------+-----------+-----------+
| | | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+----------------+--------+---------+---------+---------+---------+-----------+-----------+
| Gains/(losses) | | - | 151,221 | 151,221 | - | (121,593) | (121,593) |
| on investments | | | | | | | |
| held at fair | | | | | | | |
| value through | | | | | | | |
| profit or loss | | | | | | | |
+----------------+--------+---------+---------+---------+---------+-----------+-----------+
| Net | | - | 996 | 996 | - | (115) | (115) |
| foreign | | | | | | | |
| currency | | | | | | | |
| gains/(losses) | | | | | | | |
+----------------+--------+---------+---------+---------+---------+-----------+-----------+
| Income | | 8,116 | - | 8,116 | 9,111 | - | 9,111 |
| from | | | | | | | |
| investments | | | | | | | |
+----------------+--------+---------+---------+---------+---------+-----------+-----------+
| Other | | 315 | - | 315 | 956 | - | 956 |
| interest | | | | | | | |
| receivable | | | | | | | |
| and | | | | | | | |
| similar | | | | | | | |
| income | | | | | | | |
+----------------+--------+---------+---------+---------+---------+-----------+-----------+
| Gross | | 8,431 | 152,217 | 160,648 | 10,067 | (121,708) | (111,641) |
| return/(loss) | | | | | | | |
+----------------+--------+---------+---------+---------+---------+-----------+-----------+
| Management | | (3,627) | - | (3,627) | (3,597) | - | (3,597) |
| fee | | | | | | | |
+----------------+--------+---------+---------+---------+---------+-----------+-----------+
| VAT | | - | - | - | 2,754 | - | 2,754 |
| recoverable | | | | | | | |
+----------------+--------+---------+---------+---------+---------+-----------+-----------+
| Other | | (612) | - | (612) | (620) | - | (620) |
| administrative | | | | | | | |
| expenses | | | | | | | |
+----------------+--------+---------+---------+---------+---------+-----------+-----------+
| Net | | 4,192 | 152,217 | 156,409 | 8,604 | (121,708) | (113,104) |
| return/(loss) | | | | | | | |
| on ordinary | | | | | | | |
| activities | | | | | | | |
| before | | | | | | | |
| finance costs | | | | | | | |
| and taxation | | | | | | | |
+----------------+--------+---------+---------+---------+---------+-----------+-----------+
| Finance | | (1,250) | - | (1,250) | (136) | - | (136) |
| costs | | | | | | | |
+----------------+--------+---------+---------+---------+---------+-----------+-----------+
| Net | | 2,942 | 152,217 | 155,159 | 8,468 | (121,708) | (113,240) |
| return/(loss) | | | | | | | |
| on ordinary | | | | | | | |
| activities | | | | | | | |
| before | | | | | | | |
| taxation | | | | | | | |
+----------------+--------+---------+---------+---------+---------+-----------+-----------+
| Taxation | | (775) | - | (775) | (1,105) | - | (1,105) |
+----------------+--------+---------+---------+---------+---------+-----------+-----------+
| Net | | 2,167 | 152,217 | 154,384 | 7,363 | (121,708) | (114,345) |
| return/(loss) | | | | | | | |
| on ordinary | | | | | | | |
| activities | | | | | | | |
| after | | | | | | | |
| taxation | | | | | | | |
+----------------+--------+---------+---------+---------+---------+-----------+-----------+
| Return/(loss) | | 4.63p | 325.04p | 329.67p | 15.38p | (254.17)p | (238.79)p |
| per share | | | | | | | |
| (note 3) | | | | | | | |
+----------------+--------+---------+---------+---------+---------+-----------+-----------+
Details of the dividend declared are given in note 2 below.
All revenue and capital items in the above statement derive from continuing
operations. No operations were acquired or discontinued in the year.
The 'Total' column of this statement is the profit and loss account of the
Company and the 'Revenue' and 'Capital' columns represent supplementary
information prepared under guidance issued by the Association of Investment
Companies. The Total column represents all the information that is required to
be disclosed in a Statement of Total Recognised Gains and Losses ('STRGL'). For
this reason a STRGL has not been presented.
Reconciliation of Movements in Shareholders' Funds
+---------------+---------+---------+------------+---------+-----------+---------+-----------+
| | Called | | Capital | | | | |
| | up | | | | | | |
+---------------+---------+---------+------------+---------+-----------+---------+-----------+
| | share | Share | redemption | Other | Capital | Revenue | |
+---------------+---------+---------+------------+---------+-----------+---------+-----------+
| | capital | premium | reserve | reserve | reserves | reserve | Total |
+---------------+---------+---------+------------+---------+-----------+---------+-----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+---------------+---------+---------+------------+---------+-----------+---------+-----------+
| At | 12,837 | 1,312 | 2,799 | 415 | 384,374 | (7,780) | 393,957 |
| 31st | | | | | | | |
| March | | | | | | | |
| 2008 | | | | | | | |
+---------------+---------+---------+------------+---------+-----------+---------+-----------+
| Repurchase | (14) | - | 14 | (397) | - | - | (397) |
| and | | | | | | | |
| cancellation | | | | | | | |
| of the | | | | | | | |
| Company's | | | | | | | |
| own shares | | | | | | | |
+---------------+---------+---------+------------+---------+-----------+---------+-----------+
| Purchase | - | - | - | (18) | (9,119) | - | (9,137) |
| of | | | | | | | |
| shares | | | | | | | |
| into | | | | | | | |
| Treasury | | | | | | | |
+---------------+---------+---------+------------+---------+-----------+---------+-----------+
| Cancellation | (645) | - | 645 | - | - | - | - |
| of shares | | | | | | | |
| held in | | | | | | | |
| Treasury | | | | | | | |
+---------------+---------+---------+------------+---------+-----------+---------+-----------+
| Net | - | - | - | - | (121,708) | 7,363 | (114,345) |
| (loss)/return | | | | | | | |
| on ordinary | | | | | | | |
| activities | | | | | | | |
+---------------+---------+---------+------------+---------+-----------+---------+-----------+
| At | 12,178 | 1,312 | 3,458 | - | 253,547 | (417) | 270,078 |
| 31st | | | | | | | |
| March | | | | | | | |
| 2009 | | | | | | | |
+---------------+---------+---------+------------+---------+-----------+---------+-----------+
| Purchase | - | - | - | - | (8,580) | - | (8,580) |
| of | | | | | | | |
| shares | | | | | | | |
| into | | | | | | | |
| Treasury | | | | | | | |
+---------------+---------+---------+------------+---------+-----------+---------+-----------+
| Cancellation | (407) | - | 407 | - | - | - | - |
| of shares | | | | | | | |
| held in | | | | | | | |
| Treasury | | | | | | | |
+---------------+---------+---------+------------+---------+-----------+---------+-----------+
| Net | - | - | - | - | 152,217 | 2,167 | 154,384 |
| return | | | | | | | |
| on | | | | | | | |
| ordinary | | | | | | | |
| activities | | | | | | | |
+---------------+---------+---------+------------+---------+-----------+---------+-----------+
| At | 11,771 | 1,312 | 3,865 | - | 397,184 | 1,750 | 415,882 |
| 31st | | | | | | | |
| March | | | | | | | |
| 2010 | | | | | | | |
+---------------+---------+---------+------------+---------+-----------+---------+-----------+
Balance Sheet
at 31st March
+---------------+--------+----------+---------+
| | | 2010 | 2009 |
+---------------+--------+----------+---------+
| | | GBP'000 | GBP'000 |
+---------------+--------+----------+---------+
| Fixed | | | |
| assets | | | |
+---------------+--------+----------+---------+
| Investments | | 416,678 | 264,977 |
| held at | | | |
| fair value | | | |
| through | | | |
| profit or | | | |
| loss | | | |
+---------------+--------+----------+---------+
| Investment | | 12,934 | 6,206 |
| in | | | |
| liquidity | | | |
| fund held | | | |
| at fair | | | |
| value | | | |
| through | | | |
| profit or | | | |
| loss | | | |
+---------------+--------+----------+---------+
| Total | | 429,612 | 271,183 |
| investments | | | |
+---------------+--------+----------+---------+
| Current | | | |
| assets | | | |
+---------------+--------+----------+---------+
| Debtors | | 14,153 | 3,095 |
| | | | |
+---------------+--------+----------+---------+
| Cash | | 236 | 3,649 |
| and | | | |
| short | | | |
| term | | | |
| deposits | | | |
+---------------+--------+----------+---------+
| Derivative | | 18 | - |
| financial | | | |
| instruments: | | | |
| forward | | | |
| currency | | | |
| contract | | | |
| held at fair | | | |
| value | | | |
| through | | | |
| profit or | | | |
| loss | | | |
+---------------+--------+----------+---------+
| | | 14,407 | 6,744 |
+---------------+--------+----------+---------+
| Creditors: | | (28,137) | (7,848) |
| amounts | | | |
| falling | | | |
| due within | | | |
| one year | | | |
+---------------+--------+----------+---------+
| Derivative | | - | (1) |
| financial | | | |
| instrument: | | | |
| forward | | | |
| currency | | | |
| contract | | | |
| held at | | | |
| fair value | | | |
| through | | | |
| profit or | | | |
| loss | | | |
+---------------+--------+----------+---------+
| Net | | (13,730) | (1,105) |
| current | | | |
| liabilities | | | |
+---------------+--------+----------+---------+
| Total | | 415,882 | 270,078 |
| assets | | | |
| less | | | |
| current | | | |
| liabilities | | | |
+---------------+--------+----------+---------+
| Total | | 415,882 | 270,078 |
| net | | | |
| assets | | | |
+---------------+--------+----------+---------+
| Capital | | | |
| and | | | |
| reserves | | | |
+---------------+--------+----------+---------+
| Called | | 11,771 | 12,178 |
| up | | | |
| share | | | |
| capital | | | |
+---------------+--------+----------+---------+
| Share | | 1,312 | 1,312 |
| premium | | | |
+---------------+--------+----------+---------+
| Capital | | 3,865 | 3,458 |
| redemption | | | |
| reserve | | | |
+---------------+--------+----------+---------+
| Capital | | 397,184 | 253,547 |
| reserves | | | |
+---------------+--------+----------+---------+
| Revenue | | 1,750 | (417) |
| reserve | | | |
+---------------+--------+----------+---------+
| Shareholders' | | 415,882 | 270,078 |
| funds | | | |
+---------------+--------+----------+---------+
| Net | | 907.6p | 573.6p |
| asset | | | |
| value | | | |
| per | | | |
| share | | | |
| (note | | | |
| 4) | | | |
+---------------+--------+----------+---------+
Cash Flow Statement
Year ended 31st March
+---------------------+--------+-------------+-------------+
| | | 2010 | 2009 |
+---------------------+--------+-------------+-------------+
| | | GBP'000 | GBP'000 |
+---------------------+--------+-------------+-------------+
| Net | | 2,676 | 6,921 |
| cash | | | |
| inflow | | | |
| from | | | |
| operating | | | |
| activities | | | |
+---------------------+--------+-------------+-------------+
| Returns | | | |
| on | | | |
| investments | | | |
| and | | | |
| servicing | | | |
| of finance | | | |
+---------------------+--------+-------------+-------------+
| Interest | | (1,230) | (134) |
| paid | | | |
+---------------------+--------+-------------+-------------+
| Net | | (1,230) | (134) |
| cash | | | |
| outflow | | | |
| from | | | |
| returns | | | |
| on | | | |
| investments | | | |
| and | | | |
| servicing | | | |
| of finance | | | |
+---------------------+--------+-------------+-------------+
| Taxation | | | |
+---------------------+--------+-------------+-------------+
| Overseas | | 450 | 48 |
| tax | | | |
| recovered | | | |
+---------------------+--------+-------------+-------------+
| Capital | | | |
| expenditure | | | |
| and | | | |
| financial | | | |
| investment | | | |
+---------------------+--------+-------------+-------------+
| Purchases | | (1,484,090) | (1,042,594) |
| of | | | |
| investments | | | |
+---------------------+--------+-------------+-------------+
| Sales | | 1,472,595 | 1,046,229 |
| of | | | |
| investments | | | |
+---------------------+--------+-------------+-------------+
| Other | | (196) | (66) |
| capital | | | |
| charges | | | |
+---------------------+--------+-------------+-------------+
| Net | | (11,691) | 3,569 |
| cash | | | |
| (outflow)/inflow | | | |
| from capital | | | |
| expenditure and | | | |
| financial | | | |
| investment | | | |
+---------------------+--------+-------------+-------------+
| Net | | (9,795) | 10,404 |
| cash | | | |
| (outflow)/inflow | | | |
| before financing | | | |
+---------------------+--------+-------------+-------------+
| Financing | | | |
| | | | |
+---------------------+--------+-------------+-------------+
| Net | | 12,857 | - |
| drawdown | | | |
| of loans | | | |
+---------------------+--------+-------------+-------------+
| Purchase | | (7,976) | (8,701) |
| of | | | |
| shares | | | |
| into | | | |
| Treasury | | | |
+---------------------+--------+-------------+-------------+
| Repurchase | | - | (397) |
| and | | | |
| cancellation | | | |
| of the | | | |
| Company's | | | |
| own shares | | | |
+---------------------+--------+-------------+-------------+
| Net | | 4,881 | (9,098) |
| cash | | | |
| inflow/(outflow) | | | |
| from financing | | | |
+---------------------+--------+-------------+-------------+
| (Decrease)/increase | | (4,914) | 1,306 |
| in cash for the | | | |
| year | | | |
+---------------------+--------+-------------+-------------+
1. Accounting policies
The accounts are prepared in accordance with the Companies Act 2006,
United Kingdom Generally Accepted Accounting Practice ('UK GAAP') and with the
Statement of Recommended Practice 'Financial Statements of Investment Trust
Companies' (the 'SORP') issued by the AIC in January 2009. All of the Company's
operations are of a continuing nature.
The accounts have been prepared on a going concern basis under the
historical cost convention, as modified by the revaluation of investments and
derivative financial instruments at fair value.
The policies applied in these accounts are consistent with those applied
in the preceding year.
2. Dividend declared
+----------+--------+---------+---------+
| | | 2010 | 2009 |
+----------+--------+---------+---------+
| | | GBP'000 | GBP'000 |
+----------+--------+---------+---------+
| Dividend | | 1,375 | - |
| declared | | | |
| of 3.0p | | | |
| per | | | |
| share | | | |
| (2009: | | | |
| nil) | | | |
+----------+--------+---------+---------+
The dividend declared of 3.0p per share in respect of the year ended
31st March 2010 (2009: nil) is subject to shareholder approval at the
forthcoming Annual General Meeting. In accordance with the accounting policy of
the Company, this dividend will be reflected in the accounts for the year ending
31st March 2011.
3. Return/(loss) per share
The revenue return/(loss) per share is based on the revenue attributable
to the ordinary shares of GBP2,167,000 (2009: GBP7,363,000) and on the weighted
average number of shares in issue during the year of 46,829,499 (2009:
47,884,236) excluding shares held in Treasury.
The capital return per share is based on the capital return attributable
to the ordinary shares of GBP152,217,000 (2009: loss of GBP121,708,000) and on
the weighted average number of shares in issue during the year of 46,829,499
(2009: 47,884,236) excluding shares held in Treasury.
The total return per share is based on the total return attributable to
the ordinary shares of GBP154,384,000 (2009: loss of GBP114,345,000) and on the
weighted average number of shares in issue during the year of 46,829,499 (2009:
47,884,236) excluding shares held in Treasury.
4. Net asset value per share
The net asset value per share is based on the net assets attributable to
the ordinary shareholders of GBP415,882,000 (2009: GBP270,078,000) and on the
45,821,106 (2009: 47,084,653) shares in issue at the year end, excluding shares
held in Treasury.
5. Status of announcement
2009 Financial Information
The figures and financial information for 2009 are extracted from the published
Annual Report and Accounts for the year ended 31st March 2009 and do not
constitute the statutory accounts for that year. The Annual Report and Accounts
has been delivered to the Registrar of Companies and included the Report of the
Independent Auditors which was unqualified and did not contain a statement under
either section 237(2) or section 237(3) of the Companies Act 1985.
2010 Financial Information
The figures and financial information for 2010 are extracted from the
Annual Report and Accounts for the year ended 31st March 2010 and do not
constitute the statutory accounts for the year. The Annual Report and Financial
Accounts includes the Report of the Independent Auditors which is unqualified
and does not contain a statement under either section 498(2) or section 498(3)
of the Companies Act 2006. The Annual Report and Accounts will be delivered to
the Registrar of Companies in due course.
Annual Report and Accounts
The Annual Report and Accounts will be posted to shareholders on or around 4th
June 2010 and will shortly be available on the Company's website
(www.jpmeuropeanfledgeling.co.uk) or in hard copy format from the Company's
Registered Office, Finsbury Dials, 20 Finsbury Street, London EC2Y 9AQ.
JPMORGAN ASSET MANAGEMENT (UK) LIMITED
Please note that up to date information on the Company, including daily NAV and
share prices, factsheets and portfolio information can be found at
www.jpmeuropeanfledgeling.co.uk
For further information please contact:
Jonathan Latter
For and on behalf of
JPMorgan Asset Management (UK) Limited, Secretary 020
7742 6000
28th May 2010
This information is provided by RNS
The company news service from the London Stock Exchange
END
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