RNS Number:6032Q
JPMorgan Fleming Mercantile IT PLC
20 March 2008



                       LONDON STOCK EXCHANGE ANNOUNCEMENT

                JPMORGAN FLEMING MERCANTILE INVESTMENT TRUST PLC

                           FINAL RESULTS - UNAUDITED


Over the year to 31st January 2008 the Company's total return on net assets
(i.e. with net income reinvested) was -16.2%, which compares with a return of
-12.7% on the same basis from the Company's benchmark index, the FTSE All-Share
(excluding FTSE 100 constituents and investment trusts). As has been widely
acknowledged, the last six months of the year to 31st January 2008 were
difficult, volatile times for the market, particularly the small and mid cap
sector. However, the underperformance against the benchmark in the current year
should be viewed in the context of the overperformance achieved during the
previous seven years.


Earnings and Dividends

Earnings per share increased by 44.6% for the year, from 27.51p to 39.79p partly
due to the receipt of some special dividends, a higher level of interest income
and the accrual of recoverable VAT.

The Company has paid three interim dividends of 5.5p per ordinary share, and the
Directors have declared a fourth quarterly interim dividend of 17.5p and, in
addition, reflecting the accrual of recoverable VAT, the Directors have declared
a special dividend of 4.0p, giving a total dividend of 38.0p for the year, an
increase of 52.0%. It is the Board's intention to continue to operate a
progressive dividend policy and to increase the level of the first three
quarterly dividends for the current financial year, thereby spreading the
payment of the total dividend more evenly throughout the year.


Share Price Discount

The share price fell by 18.9% during the year and including dividends paid the
total return to shareholders was -16.7%. The discount to net asset value widened
during the year from 8.9% to 10.5% (with debt at fair value). The average weekly
discount, with debt at fair value, during the year was 10.4%.


Share Repurchases

During the year under review a total of 20.755m shares were repurchased for
cancellation, amounting to 16.6% of issued share capital, at a total cost of
�271.07m.  The purchase of 12.263m of these shares utilised authority granted at
the 2006 AGM and the purchase of 8.492m of these shares utilised authority
granted at the 2007 AGM.  The Board continued to take a proactive approach
towards share repurchases in order to enhance the net asset value and minimise
the absolute level and volatility of the discount on the Company's shares.
Share repurchases during the year under review have added approximately 28 pence
to the net asset value per share.

The Board is therefore proposing that the authority be renewed at the
forthcoming Annual General Meeting.


VAT case

Following HM Revenue & Customs' announcement in November 2007 that it was
withdrawing its appeal in the case brought jointly by the AIC and JPMorgan
Claverhouse Investment Trust plc challenging the imposition of VAT on management
fees paid by investment trusts, the Company is no longer obliged to pay VAT on
its management fees going forward and may be able to recover VAT paid by it on
its management fees in the past. The Board has retained advisers to act on
behalf of the Company in this matter. The Manager has undertaken to the Company
to repay to it all amounts of VAT recovered by the Manager from HM Revenue &
Customs in relation to management fees paid by the Company and, in any case, the
Company expects that all VAT paid by the Company on its management fees from the
turn of 2004/2005 onwards will be repaid to it. An amount of �5.8m (5.6p per
share) (comprising approximately 4.8p per share in respect of the expected
recovery of VAT from previous years and 0.8p per share in respect of the
expected recovery of VAT over the year to 31st January 2008) is therefore
included in the Company's net assets at the year end in respect of the period
from 1st February 2001 onwards, although the sum may not be received by the
Company until recovery of certain sums is made from HM Revenue & Customs.
Certain VAT in relation to earlier periods may also be recoverable and the
Company is in discussions with its Manager in relation to the potential recovery
of those sums.


Board

The Right Hon the Earl of Halifax was appointed a Director on 5th December 2007.
He was formerly Vice-Chairman of Christie, Manson & Woods, the European Division
of Christie's International Fine Arts Auctioneers, and a non-executive director
of Hambros Bank. He is Deputy Lieutenant of The East Riding of Yorkshire, High
Steward of York Minster and a JP. Having been appointed to the Board during the
year, he will stand for re-election at the forthcoming AGM and if appointed will
be eligible to serve for a three year term. The Directors retiring by rotation
are Charles Peel and myself. If re-elected, Charles

will serve for a further three year term. Having been a Director for more than
nine years, in accordance with the Board's policy, I offer myself for
re-election on an annual basis only.


Investment Managers

During the year the Company's investment management team recruited Emel Akan.


Observer Money Annual Awards 2007

The Company was presented with the Best Large Trust award at the Observer Money
Annual Awards in March 2007.


Change of Name

The Board believes that there are advantages to a Company of this size and
sectoral importance of having its own named identity, and wishes to revert to a
name which relates more closely to the original name of the Company. It is
proposed in the Notice of Meeting that the Company name be altered to "The
Mercantile Investment Trust plc".


Annual General Meeting

The Company's one hundred and twenty second Annual General Meeting will be held
at Trinity House, Tower Hill, London EC3N 4DH on Wednesday 30th April 2008 at
12.00 noon. In addition to the formal part of the meeting, there will be a
presentation from the Investment Managers who will answer questions on the
portfolio and performance. The meeting will be followed by a buffet lunch which
will give shareholders an opportunity to meet the Board, the Investment Managers
and representatives of JPMorgan. I look forward to seeing as many of you as
possible at the meeting.

Please submit in writing any detailed questions that you wish to raise at the
AGM to the Company Secretary at Finsbury Dials, 20 Finsbury Street, London EC2Y
9AQ or via the website. Shareholders who are unable to attend the AGM in person
are encouraged to use their proxy votes, and attention is drawn to the changes
to the proxy voting regime following the introduction of the Companies Act 2006.


Outlook

The condition of the UK stock market is dependent on the resolution over the
coming months of the current turbulence which is adversely affecting financial
markets globally. The Company has faced such conditions a number of times over
the years and the Board believes that the Company can once again achieve
positive returns for shareholders as market conditions gradually improve.


Hamish Leslie Melville
Chairman

20th March 2008


Investment Managers' Report


Market Background

A bear market in UK small and mid sized companies started in mid-2007 and share
prices continued to fall sharply towards the end of the financial year, 31st
January 2008. November and December were the worst months for small cap
performance since 1974. This was caused by fears of a global liquidity crisis
resulting from the collapse of the US mortgage-backed securities market.
Investors' demand for higher yield from securitised leveraged packages of low
quality loans resulted in a credit crunch with banks becoming unable or
unwilling to lend as some of the borrowers in these complex debt securities
started to default on their interest payments. In the UK, this led to Northern
Rock having to be rescued by the Government and the availability and cost of
mortgages from other providers tightening markedly. Several hedge funds and
other investors who were heavily geared into the market experienced difficulties
and the resulting liquidation of their assets depressed market levels further.
This was then exaggerated by the ability of other investors to sell short stocks
they did not own in anticipation of further falls. The result was that the
Company's benchmark Index, the FTSE All-Share (excluding FTSE-100 constituents
and investment trusts) fell by 12.7% during the year ended 31st January 2008.
This compared with a fall of 1.6% from the FTSE-100 Index which was buoyed up by
a strong performance from natural resources stocks, especially mining companies.

That said, the reported earnings, and more especially dividends, from small and
mid sized companies continued to be very strong as the UK economy recorded its
62nd consecutive quarter of GDP growth. The weak performance of the shares was
in anticipation of profit forecasts for the coming year having to be reduced as
forecasts for economic growth began to fall.


Performance

The Company's net asset value total return of -16.2% for the year ended 31st
January 2008 compared with a return of -12.7% from the benchmark index. The
total return to shareholders was -16.7% as the share price discount to net asset
value (with debt at fair value) widened from 8.9% to 10.5% during the financial
year.

The biggest contributor to underperformance was the Company's overweight stance
in the household goods sector, that is housebuilders. Their share prices were
hit hard as consumer confidence reduced in the face of the credit crunch and as
the availability of mortgages reduced and their cost increased. The mining
sector was the Company's next worst sector as the momentum behind the rising
prices of gold and platinum drove Randgold Resources and Aquarius Platinum
shares higher. We do not hold Aquarius and are underweight in Randgold. In
General Financials we suffered relatively from not having London Stock Exchange,
which was driven higher by the Sovereign Wealth Funds building positions, and
also from setbacks in Investec and Shore Capital on reduced prospects in
financial markets. That said, in the Banking sector we benefited relatively by
not holding Bradford and Bingley when it was hit. We outperformed in Oil and Gas
Producers as the volatile stock market gave us the opportunity to buy producing
oil assets at below the level of recent industry deals. In particular, we
benefited from the agreed bid from ENI for Burren Energy. However, Food
Producers was the best performing sector, with the Company benefiting from not
holding Premier Foods, which fell sharply on concerns over servicing its debt as
raw materials prices, especially wheat, rose substantially. By the same token,
we benefited from the strong increase in palm oil prices through the Company's
holdings in palm oil plantation companies MP Evans and New Britain Palm Oil.


Activity

Gearing was managed actively throughout the year. Having started the year with
gearing of 2% this had been reduced to no gearing at the interim to reflect that
markets had started to fall and at the year end we held 5% cash in order to
preserve value in a falling market. The largest contributor to the cash raising
was the reduction in exposure to housebuilders where more than �200m of
housebuilding shares were sold between June and September.  The Investment
Managers have the flexibility to operate within a gearing range of 90%-120%
invested and a more specific tactical range is agreed regularly with the Board.

Corporate activity continued to be a feature during the year with the Company
benefiting from holding more than half of the takeovers that occurred in the
FTSE mid 250 index. Burren Energy was the biggest contributor to performance but
others included Domestic and General, EMI, Kelda and London Merchant Securities.

Against a background where we were generally reducing the Company's exposure to
equities we neverthelsss made a number of new purchases last year as we
continued to search for growth from smaller stocks. These included: Gem
Diamonds, New Britain Palm Oil, Prezzo, GLG Partners, London and Stamford
Property, China Real Estate and Hargreaves Lansdown.

The portfolio retains its style of broad diversification across all sectors,
holding 150 stocks, of which 96 are mid sized and 54 smaller. By value, more
than 80% of the portfolio is in mid sized stocks, which is close to the size
split of the benchmark. The holding of companies of greater than �1.5bn market
capitalisation is now lower than the index weighting. This reflects that
throughout the year we have sold mid 250 stocks which have been promoted into
the FTSE 100, but not bought many of those which were demoted, such as Punch
Taverns, Mitchells and Butlers, Northern Rock and Tate and Lyle, none of which
are held in the portfolio.

We remain overweight in the very smallest companies, which are offering good
growth prospects. Smaller companies are now more lowly rated than the rest of
the market and therefore relatively more attractive.

Of the ten largest holdings as at 31st January 2008 only three, GKN, Daily Mail
and Burberry were in the top ten last year. Drax and Segro were bought having
been demoted from the FTSE 100 during the year and the remaining five were all
held within the portfolio a year ago. By comparison, the top ten one year ago
contained five housebuilders, none of which are in the top ten this year and
also EMI which was sold on a takeover bid and Amec which was sold on promotion
into the FTSE 100. We sell stocks which are promoted into the FTSE 100 within 18
months of promotion at the latest and never let the weighting in FTSE 100 stocks
exceed 5% of the portfolio. Currently we hold no FTSE 100 stocks.

During the year we met or visited more than 250 companies and this remains a key
component in our process of evaluating companies. We believe that properly
targeted company meetings can help us analyse smaller growth companies that are
often overlooked by the mainstream, evaluate management and resolve issues. Our
fundamental analysis of companies is aided by JP Morgan's in-house proprietary
screening process which helps us to identify companies that exhibit the best
value and growth characteristics.


Outlook

The stockmarket is currently nervous, reflecting uncertainty; economic growth
will slow and analysts profit forecasts for companies will have to be cut; more
financial write downs will be needed, especially from the banks. This process
has started but analysts' forecasts are still not low enough and banks have
still not written off enough of their bad assets. However, the sharp fall seen
in share prices means that equities are now good long term value. We shall
continue to be rigorous in screening out losers and reducing portfolio risk, to
reflect the uncertainty in markets, while searching out positive momentum as the
next investment theme takes hold.

The underlying holdings in the Mercantile portfolio currently stand on a 12
month forward PER of 10.4X and a dividend yield of 4.2%. This is good value. The
PER for Mercantile is lower than that for the benchmark and for the FTSE 100.
The yield is higher and both earnings and dividends are forecast to enjoy higher
growth.

After the sharp fall in the stockmarket in January we have now reinvested some
of the cash holding such that we currently have a neutral gearing position, that
is no net cash or borrowings. The high level of volatility in the stockmarket
gives us the opportunity to execute our consistent long term strategy of buying
assets, such as land, property and oil, at a discount and reasonably priced
growth, currently available in such sectors as aerospace, commodities and spread
betting.

We continue to believe that small and mid sized equities are the most
interesting asset class over the long term; a London Business School study shows
that since 1955 they have outperformed in more than two years out of three.
Despite the current economic uncertainties, small and mid sized equities are now
offering higher forecast earnings growth than FTSE 100 companies, whilst trading
at a similar PE ratio. That said, we expect the stockmarket to remain volatile
until credit markets stabilise and as further economic and financial downgrades
emerge. We plan to use that volatility to buy both assets and growth at
attractive levels and small and mid sized companies offer good long term value
at current levels.


Martin Hudson
Jane Lennard
Emel Akan
Investment Managers
20th March 2008


For further information, please contact:

Jonathan Latter
For and on behalf of
JPMorgan Asset Management (UK) Limited - Secretary
020 7742 6000



JPMorgan Fleming Mercantile Investment Trust plc
Unaudited figures for the year ended 31st January 2008

Income Statement
                               (Unaudited)                                        (Audited)
                               Year ended 31st January 2008             Year  ended 31st January 2007
                                   Revenue      Capital         Total    Revenue     Capital       Total
                                     �'000        �'000         �'000      �'000       �'000       �'000
(Losses)/gains on investments
held at fair value through
profit or loss                           -    (271,045)     (271,045)          -     377,824     377,824
Net foreign currency losses              -         (42)          (42)          -        (56)        (56)
Income from investments             43,948            -        43,948     42,099           -      42,099
Other interest receivable and
similar income                       7,736            -         7,736      3,394           -       3,394
                                   _______     ________       _______    _______    ________     _______

Gross return/(loss)                 51,684    (271,087)     (219,403)     45,493     377,768     423,261

Management fee                     (3,900)      (3,900)       (7,800)    (3,961)     (3,961)     (7,922)

Other administrative expenses        (842)            -         (842)      (821)           -       (821)

VAT recoverable                      2,921        2,922         5,843          -           -           -
                                   _______      _______       _______    _______     _______     _______

Net return/(loss) on ordinary
activities before finance
costs and taxation                  49,863    (272,065)     (222,202)     40,711     373,807     414,518

Finance costs                      (5,518)      (5,518)      (11,036)    (5,668)     (5,668)    (11,336)
                                   _______      _______       _______    _______     _______     _______

Net return/(loss) on ordinary
activities before taxation          44,345    (277,583)     (233,238)     35,043     368,139     403,182

Taxation                                 -            -             -          -           -           -
                                    ______      _______       _______     ______     _______     _______

Net return/(loss) on ordinary
activities after taxation           44,345    (277,583)     (233,238)     35,043     368,139     403,182
                                     =====        =====         =====      =====       =====       =====
Return/(loss) per share
(note 3)                            39.79p    (249.10)p     (209.31)p     27.51p     289.06p     316.57p


Dividends proposed in respect of the financial year ended 31st January 2008
total 38.0p per share (2007: 25.0p per share) costing �40,113,000 (2007:
�31,363,000).

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. 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.



JPMorgan Fleming Mercantile Investment Trust plc
Unaudited figures for the year ended 31st January 2008


Reconciliation of Movements in Shareholders' Funds (Unaudited)

                                        Called up                   Capital
                                            Share        Share   redemption     Capital     Revenue
                                          capital      premium      reserve     reserve     reserve      Total
                                            �'000        �,000        �'000       �'000       �'000      �'000

At 31st January 2006                       33,123       23,459        3,647   1,346,761      38,004  1,444,994
Shares bought back and cancelled          (1,859)            -        1,859    (75,662)           -   (75,662)
Total  return from ordinary activities          -            -            -     368,139      35,043    403,182
Dividends appropriated in the year              -            -            -           -    (28,666)   (28,666)
                                          _______      _______     ________     _______     _______   ________
At 31st January 2007                       31,264       23,459        5,506   1,639,238      44,381  1,743,848
Shares bought back and cancelled          (5,189)            -        5,189   (271,068)           -  (271,068)
Total (loss)/return from ordinary               -            -            -   (277,583)      44,345  (233,238)
activities
Dividends appropriated in the year              -            -            -           -    (31,392)   (31,392)
                                          _______      _______     ________     _______     _______   ________
At 31st January 2008                       26,075       23,459       10,695   1,090,587      57,334  1,208,150
                                            =====        =====        =====       =====       =====      =====




JPMorgan Fleming Mercantile Investment Trust plc
Unaudited figures for the year ended 31st January 2008


Balance sheet
                                                                        (Unaudited)            (Audited)
                                                                    Year ended 31st     Year  ended 31st
                                                                            January              January
                                                                               2008                 2007
                                                                              �'000                �'000
Fixed assets
Investments at fair value through profit or loss                          1,145,680            1,778,500

Current assets
Debtors                                                                       7,798               31,112
Cash and short term deposits                                                287,985              129,733
                                                                            _______              _______
                                                                            295,783              160,845

Creditors: amounts falling due within one year                             (56,604)             (18,884)
                                                                            _______              _______
Net current assets                                                          239,179              141,961
                                                                            _______              _______
Total assets less current liabilities                                     1,384,859            1,920,461

Creditors: amounts falling due after more than  one year                  (176,709)            (176,613)
                                                                            _______              _______
Total net assets                                                          1,208,150            1,743,848
                                                                              =====                =====
Capital and reserves
Called up share capital                                                      26,075               31,264
Share premium                                                                23,459               23,459
Capital redemption reserve                                                   10,695                5,506
Capital reserve                                                           1,090,587            1,639,238
Revenue reserve                                                              57,334               44,381
                                                                            _______              _______
Shareholders' funds                                                       1,208,150            1,743,848
                                                                              =====                =====

Net asset value per  share (note 4)                                        1,158.3p             1,394.4p



JPMorgan Fleming Mercantile Investment Trust plc
Unaudited figures for the year ended 31st January 2008


Cash flow statement
                                                                        (Unaudited)            (Audited)
                                                                       31st January         31st January
                                                                               2008                 2007
                                                                              �'000                �'000

Net cash inflow from operating activities                                    45,371               35,224

Servicing of finance
Interest paid                                                              (10,927)             (11,258)
                                                                            _______              _______
Net cash outflow from servicing of finance                                 (10,927)             (11,258)

Financial investment
Purchases of investments                                                (1,079,216)          (1,000,018)
Sales of investments                                                      1,509,476            1,222,420
Other capital charges                                                          (61)                 (13)
                                                                            _______              _______
Net cash  inflow from financial investment                                  430,199              222,389

Total equity dividends paid                                                (31,392)             (28,666)
                                                                            _______              _______
Net cash inflow before financing                                            433,251              217,689

Financing
Repurchase of ordinary shares                                             (274,953)             (80,009)
Repayment of short term overdraft                                                 -              (7,897)
                                                                            _______              _______
Net cash outflow from financing                                           (274,953)             (87,906)
                                                                            _______              _______
Increase in cash in the year                                                158,298              129,783
                                                                              =====                =====


Notes to the Accounts


1. Accounting policies

The accounts have been prepared in accordance with the Companies Act 1985,
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 December 2005. The accounting
policies applied in these accounts are consistent with those applied in the
accounts for the prior year.

All of the Company's operations are of a continuing nature.


2. Dividends paid and declared
                                                                        (Unaudited)              (Audited)
                                                                         Year ended             Year ended
                                                                  31st January 2008      31st January 2007
                                                                              �'000                  �'000

                 Unclaimed dividends refunded to the Company                   (38)                   (43)
          2007 fourth quarterly dividend of 11.5p (2006: 9.0p)               13,742                 11,728
                 First quarterly dividend of 5.5p (2007: 4.5p)                6,039                  5,667
                Second quarterly dividend of 5.5p (2007: 4.5p)                5,881                  5,667
                 Third quarterly dividend of 5.5p (2007: 4.5p)                5,768                  5,647
                                                                            _______                 ______
                              Total dividends paid in the year               31,392                 28,666
                                                                             ======                  =====

             Fourth quarterly dividend of 17.5p (2007: 11.50p)               18,253                 14,382
                          Special dividend of 4.0p (2007: nil)                4,172                      -
                                                                            _______                 ______
                                                                             22,425                 14,382
                                                                             ======                  =====


The fourth quarterly and special dividends have been declared in respect of the
year ended 31st January 2008. In accordance with the accounting policy of the
Company, these dividends will be reflected in the accounts for the year ending
31st January 2009.


3. Return/(loss) per share
                                                                      (Unaudited)               (Audited)
                                                                       Year ended              Year ended
                                                                31st January 2008       31st January 2007
                                                                            �'000                   �'000
                Return per share is based on the following:
                                             Revenue return                44,345                  35,043
                                      Capital (loss)/return             (277,583)                 368,139
                                                                          _______                  ______
                                        Total (loss)/return             (233,238)                 403,182
                                                                           ======                   =====

                 Weighted average number of shares in issue           111,433,402             127,359,350
                                   Revenue return per share                39.79p                  27.51p
                            Capital (loss)/return per share             (249.10)p                 289.06p
                                                                          _______                  ______
                              Total (loss)/return per share             (209.31)p                 316.57p
                                                                           ======                   =====




4. Net asset value per share

The Net asset value per share is based on the net assets attributable to the
ordinary shareholders of �1,208,150,000 (2007: �1,743,848,000) and on the
104,303,166 (2007: 125,058,759) shares in issue at the year end.


5. Status of preliminary announcement

The financial information set out in this preliminary announcement does not
constitute the Company's statutory accounts for the years ended 31st January
2007 or 2008. The statutory accounts for the year ended 31st December 2007 have
been reported on by the Company's auditors and have been delivered to the
Registrar of Companies. The auditors report for the year ended 31st  January
2007 was unqualified and contained no statement under S237(2) or S237(3) of the
Companies Act 1985. The statutory accounts for the year ended 31st January 2008
have not been delivered to the Registrar of Companies, nor have the auditors yet
reported on them. The statutory accounts for the year ended 31st January 2008
will be finalised on the basis of the information presented by the Directors in
this preliminary announcement and will delivered to the Registrar of Companies
following the approval of the accounts by the Board of Directors.



JPMORGAN ASSET MANAGEMENT (UK) LIMITED

20th March 2008




                      This information is provided by RNS
            The company news service from the London Stock Exchange
END

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