TIDMJPB
RNS Number : 4789I
JPMorgan Brazil Investment Trust
08 August 2019
The following amendment has been made to the announcement
released today at 17.07 under RNS No 4720I.
The full amended text is shown below.
LONDON STOCK EXCHANGE ANNOUNCEMENT
JPMORGAN BRAZIL INVESTMENT TRUST PLC
(the 'Company')
FINAL RESULTS FOR THE YEARED
30TH APRIL 2019
Legal Entity Identifier: 5493002T5BE3YCTKTE20
Information disclosed in accordance with DTR 4.2.2
CHAIRMAN'S STATEMENT
Introduction and Performance
Over the financial year to 30th April 2019, equity markets in
Brazil experienced another highly volatile period dominated by
politics, fears about rising inflation and negative sentiment
towards the country's economic outlook. For the year to 30th April
2019, the Company's total return on net assets was +3.4%, compared
with +6.8% returned by the benchmark, the MSCI Brazil 10/40 Index
(in sterling terms with net dividends re-invested). The share price
return to shareholders was -0.9% reflecting a widening in the share
price discount to net asset value over the year from 14.0% to
17.7%.
The investment managers provide a detailed commentary on the
markets and portfolio activity in their report.
Since its flotation in 2010 to 31st July 2019, the Company's NAV
has risen by 5.2%, compared with a rise of 25.6% in the benchmark
index and a fall of 72.6% in the Sterling/Brazilian Real exchange
rate.
Since the financial year-end, the Company's net asset value has
risen by 21.0%, against an increase of 19.5% in the benchmark index
and a rise of 9.65% in the Brazilian currency against sterling at
31st July 2019. These increases reflect rising expectations
following the approval at a congressional committee of Social
Security reforms by a wider voting margin than expected and in an
amount greater than expected in terms of the resulting reduction in
government expenditure over a ten year period.
Revenue and Dividends
Gross revenue for the year amounted to GBP889,000 (2018:
GBP919,000) and net total revenue after administrative expenses and
taxation amounted to GBP333,000 (2018: GBP321,000).
The Company's dividend policy has been to distribute all, or
substantially all, of the available income each year. The Board
recommends a dividend of 0.8p per Ordinary share. Subject to
shareholders' approval at the forthcoming Annual General Meeting on
10th September 2019, the dividend will be payable on 20th September
2019 to shareholders on the register at 23rd August 2019.
Asset Allocation
In accordance with the Company's investment policy, the
investment managers have continued to be substantially invested in
equities. As at 30th April 2019, the Company had 1.8% net cash.
Share Repurchases
At last year's Annual General Meeting ('AGM'), shareholders
granted Directors authority to repurchase the Company's shares.
During the financial year, the Company did not repurchase any
shares. Whilst the Company's share price has been trading at a
discount to NAV this has been volatile and based on very small
trading volumes. The Company's size discouraged the board from
utilising the repurchase authority which was unlikely to have
stabilised the discount in the face of wider sector volatility and
may have resulted in unnecessarily shrinking the Company.
The Board's objective remains to use the share repurchase
authority to manage significant imbalances between the supply and
demand of the Company's shares, thereby reducing the volatility of
the discount. The Board believes that the availability of this
mechanism is important and therefore proposes and recommends that
powers to repurchase up to 14.99% of the Company's issued share
capital be renewed for a further period.
Annual General Meeting ('AGM')
The Company's ninth AGM will be held on 10th September 2019 at
2.00 p.m. at 60 Victoria Embankment, London EC4Y 0JP. The meeting
will include a presentation from the investment managers on
investment policy and performance. There will also be an
opportunity for shareholders to meet the Board and representatives
of JPMorgan after the meeting.
If you wish to raise any detailed or technical questions at the
Meeting, it would be helpful if you could mention them in advance
by writing to the Company Secretary. Shareholders who are unable to
attend the Meeting in person are encouraged to use their proxy
votes.
Outlook and Continuation
GDP growth in Brazil over the medium and longer term is mainly
dependent on the extent of reforms to social security, taxation,
labour markets and education, as well as continuation of the
privatisation programme. The initial votes in the lower house of
Congress on the Social Security Reforms, as noted above, in a
greater amount and by a much wider margin than expected, augur well
for their final approval in both houses of Congress, which is
currently expected before the year end. If the Social Security
Reforms obtain this final approval, the momentum will exist for the
government to move on to the other reforms mentioned above with tax
reform likely to be the priority. If passed, these additional
reforms will raise the long-run sustainable rate of growth of the
Brazilian economy substantially. In addition, the recent conclusion
of negotiations for a free trade agreement between MERCOSUL, of
which Brazil is the leading member, and the European Union augurs
well for the future as this is expected to have a positive impact
on many of the key sectors in the Brazilian economy.
The Company's Articles of Association require that shareholders
vote on the continuation of the Company at every third AGM. The
third of these votes falls this year. The Board is fully aware of
the relative performance of the Company, its small size and the
level of its expenses. However, in view of the potential upside if
the government's reform programme proceeds as currently envisaged,
the Board believes it would not be in shareholders' interests to
liquidate the Company's assets at this time. It therefore
recommends that shareholders vote in favour of continuation at the
forthcoming AGM, The resolution to be proposed will, in order to
comply with the Articles, be a resolution that the Company
continues for a further three year period. However, if this
continuation vote is passed, the Board will voluntarily propose
another such continuation vote at a general meeting no later than
the AGM in September 2020, at which point shareholders will have a
further opportunity to consider the future of the Company in the
light of circumstances at that time.
If the continuation resolution is not passed at the forthcoming
AGM, then as required by the Articles, the Directors shall within
four months of that date convene a general meeting of the Company
at which a special resolution will be proposed, designed either to
result in the holders of shares in the Company receiving, in lieu
of their shares, units in a unit trust scheme (or equivalent) or
which shall be a resolution requiring the Company to be wound up
voluntarily.
The Board
All three Directors have now been members of the Board for nine
years. Assuming a further continuation vote, to be held no later
than September 2020, is passed, I will retire from the Board
following the vote, with further changes being made over the
ensuing year, with a view to refreshing the Board completely by
2021. All the current Directors consider themselves to be
independent, but all will seek annual re-election at every AGM for
the rest of their term of office.
Howard Myles
Chairman
8th August 2019
investment managers' report
Market background: before and after the 'Bolsonaro Bounce'
Brazil's presidential election at the end of October was the
pivotal political event of the period under review, coming half-way
through the Company's financial year and impacting both business
sentiment and equity markets' performance before and after.
Trepidation in the run-up to the election was followed by euphoria
and then, latterly, reality. The remarkable political rise of
right-wing congressman Jair Bolsonaro of the Social Liberal Party
resulted in his landmark victory over left-wing Fernando Haddad of
the Workers' Party, with Bolsonaro winning 55% of the vote in the
process.
The first half of the Company's financial year - before the
Bolsonaro victory - was a period of considerable volatility, with
politics, inflation worries and market sentiment at home and abroad
all weighing heavily on the country's economic prospects. As well
as a general increase in concerns over emerging markets, Brazil's
own economy was further burdened by election fears as well as by
the much-publicised truckers' strike, which brought the country to
its knees; it triggered supply shortages, stalled production and a
fall in household spending. Industrial production in Brazil
plummeted by 10.9% in May 2018, one of the biggest monthly declines
in recent decades. Both economic growth and inflation forecasts
were revised downwards and expectations for company earnings were
lowered. Away from Brazil, fears of slowing global growth and the
ongoing tit-for-tat trade dispute between the United States and
China created fears for the global economy and precipitated
worsening market conditions around the world.
Brazilian markets stabilised in September when the clouds of
uncertainty about the likely election outcome lifted. Indeed,
post-election, and as your Company entered the second half of its
financial year, there was an extremely positive market reaction to
Bolsonaro's victory which shielded Brazilian stocks from the global
market sell-off in October. Markets rallied in comparison with
other emerging markets, reflecting high hopes and investor
confidence in the Bolsonaro government's commitment towards fiscal
and structural reform, particularly its highly anticipated plans
for a major pensions system overhaul.
The reform plans are ambitious, requiring considerable political
cooperation not yet in evidence. The government's key pension
reform bill is moving along in government, but markets have shown
little reaction on the whole. We remain cautiously optimistic about
the approval of these reforms and privatization proposals put forth
by the Bolsonaro government in Brazil. The recent rate cut in July
puts Brazil in the camp of EM countries easing to boost growth. The
macro picture in Brazil is still fairly weak, which means we focus
on companies that can deliver above-average growth and demonstrate
resilience in the face of a slower macro backdrop.
Portfolio review and spotlight on stocks
Investing in Brazil can involve a higher element of risk than
more mature markets, with short-term performance prone to political
and economic headwinds. The year to 30th April 2019 has been a
testing period in this respect, with both global and local factors
affecting the investment landscape, as explained earlier.
The Company's net asset value rose by 3.4% over the year, whilst
its share price fell by 0.9%. NAV performance lagged the benchmark
index, MSCI Brazil 10/40 which rose by 6.8%, with this
underperformance largely resulting from the positive performance of
some stocks that we have avoided because we consider them lower
quality names, but which rallied on the back of broader market
optimism. The Company's strategy remains focused on investing for
the long term and in stocks with domestic themes, although these
have been hit hard by the market conditions referenced earlier.
In this section we highlight how our investment choices have
impacted overall portfolio performance, as well as our key
portfolio shifts made over the year.
By sector, Financials is the Company's largest by some distance
and we are overweight relative to the benchmark index. Our
investment in IRB Brasil RE, the largest reinsurance company in
Latin America, was the best overall performer in the portfolio over
the review period. IRB recently celebrated its 80th anniversary
although it became a publicly held company only in July 2017. We
view this as a really well managed business and one that has
benefitted from more recent stability in interest rates. It has
successfully increased its market share, whilst maintaining its
profitability and efficiency, as well as mitigating risk.
We sold our investment in BB Seguridades, a subsidiary of Banco
do Brasil which acts as its main distribution channel. Although the
stock is trading at relatively inexpensive valuations, we believe
the financial penetration trend which has provided such a tailwind
to the stock's fortunes has now matured.
In terms of other positive contributors, our exposure to Lojas
Renner, Brazil's largest fashion retailer - and one of our top 10
holdings - was key. The stock delivered robust performance that
exceeded market expectations, despite the volatile economic
backdrop and logistical challenges resulting from the truckers'
strike. We took advantage of market weakness to add to our
investment in September, seeing potential in the business's digital
transformation goals and its plans to expand its footprint in
Argentina whilst also noting its strong and stable corporate
governance structure.
As noted in the Company's half year report, our lack of exposure
to Cielo, Brazil's largest credit and debit card operator, was
beneficial to relative performance; a year ago we had already
become more cautious on the short to medium outlook for the company
and our decision to sell our holding has proven to be a wise one:
Cielo reported an earnings miss, driven by the changing regulatory
environment, higher-than-expected marketing costs and heightened
competition, which hit profitability.
Our lack of exposure to Embraer, a Brazilian aerospace
conglomerate - and the third largest producer of civil aircraft
after Boeing and Airbus - was beneficial overall. The stock
performed poorly on the back of a filed lawsuit which aimed to
block the move by Boeing to acquire an 80% stake in Embraer.
Argentina underperformed other Latin American regions over the
year but our sole exposure to Argentina was positive: MercadoLibre
was founded in Buenos Aires in 1999 and is Latin America's most
popular e-commerce site and payments company, with over 200 million
users. The market was encouraged by MercadoLibre's proposed shift
away from relying on the country's national postal service for its
deliveries to be replaced by an internal network, which should
improve customers' experience as well as potentially reducing
shipping costs. There has also been sustained growth in its payment
transactions business, MercadoPago.
We sold our holding in medical laboratory services provider
Fleury following a change of view on the resilience of the high-end
Fleury brand. The stock had been under pressure for the last year
or so, against a backdrop of industry uncertainty and rising
healthcare costs, and our expectations for the business's prospects
over the short to medium-term shifted accordingly. We used the
proceeds of the Fleury sale to add to our investment in SulAmérica,
Brazil's second largest insurance company with more than 6.3
million customers. As well as healthcare, SulAmérica operates in
multiple insurance segments such as life and personal accident
insurance.
The prospect of a recovering economy plus positive operational
results drove our decision to invest in SulAmérica. These factors
also influenced our investment in Atacadao, a food retailer and
subsidiary of the Carrefour group. The company has been
transforming its business through store openings and e-commerce
initiatives. It has delivered productivity and competitiveness
gains despite the prevailing economic environment.
We increased our exposure to Localiza, the largest car rental
network in South America, which posted impressive results for 2018.
The stock has demonstrated growth resilience by focusing on
quality, productivity and diversification.
We reduced our exposure to Communication Services, by selling
out of Telefônica Brasil and Smile, rotating the sale proceeds into
the Utilities sector. Smile is a loyalty programme administrator
for GOL Airlines which ran into headwinds with certain shareholders
last autumn, following its announcement of a major corporate
reorganisation. Within Utilities, we invested in CEMIG, one of
Brazil's leading players in the electric energy sector as well as
Equatorial Energia.
In December, we sold our investment in Suzano, a pulp and paper
producer with sustainable growth at its heart. We have become
increasingly pessimistic on the direction of travel for pulp prices
and the expected return is insufficient to justify staying
invested.
Negative market sentiment in early 2019 created a buying
opportunity for us, as we increased our investment in Ambev, Latin
America's largest brewing company. Our research suggests that Ambev
is well positioned to benefit from Brazil's improving, if
unpredictable, investment cycle. The company has recently
emphasised its sustainability credentials by signing contracts to
build solar plants to supply clean energy to all of its
distribution centres.
Outlook: uncertainty brings opportunity
As the only closed-ended fund that specifically targets
Brazilian focused companies, the Company is well placed to tap into
the country's strong domestic growth potential. This is not without
its challenges and, at least in the short term, market uncertainty
and fragile business sentiment are likely to prevail.
Globally, economic momentum has faltered, and the US-China trade
spat that has dominated the business and economic news continues to
linger. In Brazil itself, projections for economic growth have been
reduced to 1.7% and the road to economic recovery will depend very
much on the progress of fiscal reforms, so badly needed to
alleviate the government's structural expenses and plug the gaping
budget deficit. The scale and success of these reforms will
determine the country's future economic growth trajectory. Although
we believe the government is resolute on delivering these reforms,
the administration's progress has been laboured so far and
confidence in its ability to do so has plummeted. Opposition to the
reform process remains formidable and future battles could
seriously jeopardise the ability of the reforms to tackle the
budget deficit. Failure could have harsh consequences for the
Brazilian economy, pushing it back into recession.
There are positives: privatisations are planned for several
state-owned entities and the Bolsonaro government's more
pro-business stance should fuel growth. The Brazilian currency is
cheaper than it was in effective terms and we expect it to
strengthen from here, increasing the sterling value of Brazilian
company earnings and valuations. Historically low interest rates
(and a benign outlook for rates), low inflation, high earnings
growth expectations and a recent marginal improvement in
unemployment figures also provide cause for cautious optimism.
We believe the financial and operational leverage of the economy
will come through in due course and that, this time, the domestic
names that we favour should outshine those in the materials and
energy sectors that benefitted from currency rates and commodities
strength last year.
Credit growth to both individuals and companies turned positive
in 2018 and we expect this trend to continue, supporting future
economic activity. However, in the short term, all eyes will remain
fixed on the progress of pensions reform; this will be the key
determinant of economic growth which we expect to remain muted
until tangible progress is evident.
Our own focus remains unchanged: investing in fundamentally
sound businesses with good long-term prospects to deliver solid
shareholder returns. We are confident in the quality of the
Company's portfolio and mindful that with uncertainty comes
opportunity: we view sentiment shifts and market setbacks as
opportunities to buy into high quality businesses with good
prospects that are resilient in uncertain times. We will continue
to adhere to this approach whilst maintaining a balanced risk
profile. Our portfolio is positioned for a recovery in the domestic
economy once the current challenges have been overcome, poised to
tap into a more positive long-term outlook for Brazil.
Luis Carrillo
Sophie Bosch De Hood
Investment Managers
8th August 2019
Principal Risks
The Directors confirm that they have carried out a robust
assessment of the principal risks facing the Company, including
those that would threaten its business model, future performance,
solvency or liquidity.
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 into 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. The Manager provides the
Directors with timely and accurate management information,
including performance data and attribution analysis, 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
reviews data which show statistical measures of the Company's risk
profile. The investment managers are free to employ the Company's
gearing to the extent that they can or hold cash, within a
strategic range set by the Board. The Board holds a separate
meeting devoted to strategy each year. In addition to the regular
Board meetings, the Board visits Brazil from time to time to
discuss strategy and consider all relevant aspects of investment in
Brazil.
-- Financial: The financial risks faced by the Company include
foreign currency risk, interest rate risk, other price risk,
liquidity risk and credit risk. Further details are disclosed in
note 20 on pages 52 to 56 of the Annual Report.
-- Accounting, Legal and Regulatory: In order to qualify as an
investment trust, the Company must comply with Section 1158.
Details of the Company's approval are given under 'Business of the
Company' above. Were the Company to breach Section 1158, it might
lose investment trust status and, as a consequence, gains within
the Company's portfolio could be subject to Capital Gains Tax. The
Section 1158 qualification criteria are continually monitored by
the Manager and the results reviewed by the Board each month. The
Company must also comply with the provisions of the Companies Act
2006 and, since its shares are listed on the London Stock Exchange,
the UKLA Listing Rules, Disclosure and Transparency Rules ('DTRs')
and, as an investment trust, the Alternative Investment Fund
Managers Directive ('AIFMD'). 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
or DTRs could result in the Company's shares being suspended from
listing which in turn would breach Section 1158. The Board relies
on the services of its Company Secretary, the Manager and its
professional advisers to ensure compliance with the Companies Act
2006 and the UKLA Listing Rules, DTRs and AIFMD.
-- 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
on pages 21 to 24 of the Annual Report.
-- Operational: Disruption to, or failure of the Manager's
accounting, dealing or payments systems or the depositary's or the
custodian's records may prevent accurate reporting and monitoring
of the Company's financial position. On 1st July 2014, the Company
appointed the Bank of New York Mellon (International) Limited to
act as its depositary, responsible for overseeing the operation of
the custodian, JPMorgan Chase Bank, N.A., and the Company's cash
flow. Details of how the Board monitors the services provided by
the Manager and its associates and the key elements designed to
provide effective internal control are included within the Risk
Management and Internal Control section of the Corporate Governance
report on pages 22 and 23 Annual Report.
-- Political and Economic: Changes in financial or tax
legislation, including in Brazil, may adversely affect the Company.
The Manager makes recommendations to the Board on accounting,
dividend and tax policies and the Board seeks external advice where
appropriate. In addition, the Company is subject to administrative
risks, such as the imposition of restrictions on the free movement
of capital. The Board monitors the impact of any changes in such
restrictions on the Company.
Transactions with the Manager and related parties
Full details of Directors' remuneration and shareholdings can be
found on pages 28 and 29 and in note 6 on page 46 of the Annual
Report.
Statement of Directors' Responsibilities
The Directors are responsible for preparing the Annual Report
and Accounts in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the Directors
have elected to prepare the financial statements in accordance with
United Kingdom Generally Accepted Accounting Practice (United
Kingdom Accounting Standards) including FRS 102 'The Financial
Reporting Standard applicable in the UK and Republic of Ireland'
and applicable law). Under company law the Directors must not
approve the financial statements unless they are satisfied that,
taken as a whole, the annual report and accounts are fair balanced
and understandable, provide the information necessary, for
shareholders to assess the Company's performance, business model
and strategy, and that they give a true and fair view of the state
of affairs of the Company and of the total return or loss of the
Company for that period. In preparing these financial statements,
the Directors are required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgments 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 a 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.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company's
transactions and disclose with reasonable accuracy at any time the
financial position of the Company and enable them to ensure that
the financial statements comply with the Companies Act 2006. They
are also responsible for safeguarding the assets of the Company and
hence for taking reasonable steps for the prevention and detection
of fraud and other irregularities.
The accounts are published on the www.jpmbrazil.co.uk website,
which is maintained by the Company's Manager. The maintenance and
integrity of the website maintained by the Manager is, so far as it
relates to the Company, the responsibility of the Manager. The work
carried out by the auditor does not involve consideration of the
maintenance and integrity of this website and, accordingly, the
auditor accepts no responsibility for any changes that have
occurred to the accounts since they were initially presented on the
website. The accounts are prepared in accordance with UK
legislation, which may differ from legislation in other
jurisdictions.
Under applicable law and regulations the Directors are also
responsible for preparing a Strategic Report, a Directors' Report
and a Directors' Remuneration Report that comply with that law. The
Strategic Report and the Directors' report include a fair review of
the development and performance of the business and the position of
the issuer, together with a description of the principal risks and
uncertainties that they face.
Each of the Directors, whose names and functions are listed on
page 18 of the Annual Report confirms that, to the best of their
knowledge the financial statements, which have been prepared in
accordance with United Kingdom Generally Accepted Accounting
Practice (United Kingdom Accounting Standards and applicable law),
give a true and fair view of the assets, liabilities, financial
position and return or loss of the Company. The Board confirms that
it is satisfied that the annual report and accounts taken as a
whole are fair, balanced and understandable and provide the
information necessary for shareholders to assess the strategy and
business model of the Company.
For and on behalf of the Board
Victor Bulmer-Thomas
Director
8th August 2019
Statement of Comprehensive income
for the year ended 30th april 2019
2019 2018
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------------- -------- -------- -------- -------- -------- --------
Gains on investments held at fair
value through profit or loss - 495 495 - 718 718
Net foreign currency losses - (40) (40) - (51) (51)
Income from investments 883 - 883 914 - 914
Interest receivable and similar income 6 - 6 5 - 5
----------------------------------------- -------- -------- -------- -------- -------- --------
Gross return 889 455 1,344 919 667 1,586
Management fee (155) - (155) (226) - (226)
Other administrative expenses (331) - (331) (304) - (304)
----------------------------------------- -------- -------- -------- -------- -------- --------
Net return on ordinary activities
before taxation 403 455 858 389 667 1,056
Taxation (70) - (70) (68) - (68)
----------------------------------------- -------- -------- -------- -------- -------- --------
Net return on ordinary activities
after taxation 333 455 788 321 667 988
----------------------------------------- -------- -------- -------- -------- -------- --------
Return per share (note 2) 0.99p 1.36p 2.35p 0.95p 1.99p 2.94p
Statement of CHANGES IN EQUITY
for the year ended 30th april 2019
Called up Capital
share Share redemption Other Capital Revenue
capital premium reserve reserve(1) reserves reserve(1) Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------------------- ---------- -------- ----------- ----------- ---------- ----------- --------
At 30th April 2017 617 16,149 13 26,879 (19,253) 924 25,329
Repurchase of shares into Treasury - - - (397) - - (397)
Net return from ordinary
activities - - - - 667 321 988
Dividend paid in the year
(note 3) - - - - - (270) (270)
----------------------------------- ---------- -------- ----------- ----------- ---------- ----------- --------
At 30th April 2018 617 16,149 13 26,482 (18,586) 975 25,650
Net return from ordinary
activities - - - - 455 333 788
Dividend paid in the year
(note 3) - - - - - (268) (268)
----------------------------------- ---------- -------- ----------- ----------- ---------- ----------- --------
At 30th April 2019 617 16,149 13 26,482 (18,131) 1,040 26,170
----------------------------------- ---------- -------- ----------- ----------- ---------- ----------- --------
(1) This forms the distributable reserve of the Company and may
be used to fund distributions to investors via dividend
payments.
STATEMENT OF FINANCIAL POSITION
at 30th april 2019
2019 2018
GBP'000 GBP'000
------------------------------------------------------- --------- ---------
Fixed assets
Investments held at fair value through profit or loss 25,686 25,295
-------------------------------------------------------- --------- ---------
Current assets
Debtors 249 134
Cash and cash equivalents 346 316
-------------------------------------------------------- --------- ---------
595 450
Creditors: amounts falling due within one year
Creditors (111) (95)
-------------------------------------------------------- --------- ---------
Net current assets 484 355
-------------------------------------------------------- --------- ---------
Total assets less current liabilities 26,170 25,650
-------------------------------------------------------- --------- ---------
Net assets 26,170 25,650
-------------------------------------------------------- --------- ---------
Capital and reserves
Called up share capital 617 617
Share premium 16,149 16,149
Capital redemption reserve 13 13
Other reserve 26,482 26,482
Capital reserves (18,131) (18,586)
Revenue reserve 1,040 975
-------------------------------------------------------- --------- ---------
Shareholders' funds 26,170 25,650
-------------------------------------------------------- --------- ---------
Net asset value per share 78.1p 76.5p
-------------------------------------------------------- --------- ---------
STATEMENT OF CASH FLOWS
for the year ended 30th april 2019
2019 2018
GBP'000 GBP'000
---------------------------------------------------------------- --------- ---------
Net cash outflow from operations before dividends and interest (546) (539)
Dividends received 749 816
Interest received 6 6
----------------------------------------------------------------- --------- ---------
Net cash inflow from operating activities 209 283
----------------------------------------------------------------- --------- ---------
Purchases of investments (10,421) (10,829)
Sales of investments 10,525 10,852
Settlement of foreign currency contracts (15) (28)
----------------------------------------------------------------- --------- ---------
Net cash inflow/(outflow) from investing activities 89 (5)
----------------------------------------------------------------- --------- ---------
Dividend paid (268) (270)
Repurchase of shares into Treasury - (397)
----------------------------------------------------------------- --------- ---------
Net cash outflow from financing activities (268) (667)
----------------------------------------------------------------- --------- ---------
Increase/(decrease) in cash and cash equivalents 30 (389)
----------------------------------------------------------------- --------- ---------
Cash and cash equivalents at start of year 316 705
Cash and cash equivalents at end of year 346 316
----------------------------------------------------------------- --------- ---------
Increase/(decrease) in cash and cash equivalents 30 (389)
----------------------------------------------------------------- --------- ---------
Cash and cash equivalents consist of:
Cash and short term deposits 64 75
Cash held in JPMorgan US Dollar Liquidity Fund 282 241
----------------------------------------------------------------- --------- ---------
Total 346 316
----------------------------------------------------------------- --------- ---------
Notes to the financial statements
for the year ended 30th april 2019
1. Accounting policies
Basis of accounting
The financial statements are prepared under the historical cost
convention, modified to include fixed asset investments at fair
value, and in accordance with the Companies Act 2006, United
Kingdom Generally Accepted Accounting Practice ('UK GAAP'),
including FRS 102 'The Financial Reporting Standard applicable in
the UK and Republic of Ireland' and with the Statement of
Recommended Practice 'Financial Statements of Investment Trust
Companies and Venture Capital Trusts' (the 'SORP') issued by the
Association of Investment Companies in November 2014, and updated
in February 2018.
All of the Company's operations are of a continuing nature.
The financial statements have been prepared on a going concern
basis. The disclosures on going concern on page 23 of the
Directors' Report in the Annual Report form part of these financial
statements. The Directors consider that it is more likely than not
that the continuation vote will be passed at the 2019 AGM and thus
the Company will continue. The Directors therefore consider that it
is appropriate for the financial statements to be prepared on the
going concern basis of accounting. Nevertheless, because the
outcome of the 2019 continuation vote and a 2020 continuation vote
if it were to occur, are uncertain there remains a material
uncertainty which may cast significant doubt as to the likelihood
of the Company continuing as going concern notwithstanding the
current strong liquidity and solvency positions. While there is no
reason to believe that the Company will not be able to realise its
assets and discharge its liabilities, if the continuation vote is
not passed it may not be able to do so in the normal course of
business.
In assessing the going concern basis of accounting, the
Directors have had regard to the guidance issued by the Financial
Reporting Council. After making enquiries, and bearing in mind the
nature of the Company's business and assets, the Directors consider
that the Company has adequate resources to continue in operational
existence for the foreseeable future. For this reason, they
continue to adopt the going concern basis in preparing the
financial statements.
The financial statements do not reflect any adjustments that
would be required to be made, if they were prepared on a basis
other than the going concern basis.
The Board recommends that shareholders vote in favour of the
continuance resolution in view of the Company's future prospects as
set out elsewhere in the document.
The policies applied in these financial statements are
consistent with those applied in the preceding year.
2. Return per share
2019 2018
GBP'000 GBP'000
-------------------------------------------------------------------- ----------------- -----------------
Revenue return 333 321
Capital return 455 667
-------------------------------------------------------------------- ----------------- -----------------
Total return 788 988
-------------------------------------------------------------------- ----------------- -----------------
Weighted average number of shares in issue during the period 33,524,854 33,601,224
Revenue return per share 0.99p 0.95p
Capital return per share 1.36p 1.99p
-------------------------------------------------------------------- ----------------- -----------------
Total return per share 2.35p 2.94p
-------------------------------------------------------------------- ----------------- -----------------
3. Dividends
(a) Dividends paid and proposed
2019 2018
GBP'000 GBP'000
--------------------------------------------------------- -------------- --------------
2018 dividend paid of 0.8p (2017: 0.8p) per share 268 270
--------------------------------------------------------- -------------- --------------
Dividend proposed of 0.8p (2018: 0.8p) per share 268 268
--------------------------------------------------------- -------------- --------------
All dividends paid and declared in the period have been funded
from the Revenue Reserve.
The final dividend proposed in respect of the year ended 30th
April 2019 is subject to shareholder approval at the forthcoming
Annual General Meeting.
This dividend will be reflected in the financial statements for
the year ending 30th April 2020.
(b) Dividend for the purposes of Section 1158 of the Income and
Corporation Tax Act 2010 ('Section 1158')
The requirement of Section 1158 of the Income and Corporation
Tax Act 2010 are considered on the basis of dividends proposed in
respect of the financial year, shown below. The revenue available
for distribution by way of dividend for the year is GBP333,000
(2018: GBP321,000). The revenue reserve after payment of the final
dividend will amount to GBP772,000 (2018: GBP707,000).
2019 2018
GBP'000 GBP'000
----------------------------------------------------- ---------- ----------
Final dividend of 0.8p (2018: 0.8p) per share 268 268
----------------------------------------------------- ---------- ----------
Minimum dividend required for s1158 purposes 200 183
----------------------------------------------------- ---------- ----------
4. Net asset value per share
2019 2018
--------------------------------- ----------------- -----------------
Net assets (GBP'000) 26,170 25,650
Number of shares in issue 33,524,854 33,524,854
--------------------------------- ----------------- -----------------
Net asset value per share 78.1p 76.5p
--------------------------------- ----------------- -----------------
5. Status of results announcement
2018 Financial Information
The figures and financial information for 2018 are extracted
from the Annual Report and Accounts for the year ended 31st March
2018 and do not constitute the statutory accounts for the year. The
Annual Report and Accounts include 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
Register of Companies in due course.
2019 Financial Information
The figures and financial information for 2019 are extracted
from the Annual Report and Accounts for the year ended 31st March
2019 and do not constitute the statutory accounts for the year. The
Annual Report and Accounts include 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
Register of Companies in due course.
JPMORGAN FUNDS LIMITED
8th August 2019
For further information, please contact:
Divya Amin
For and on behalf of
JPMorgan Funds Limited
020 7742 4000
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014. Upon the
publication of this announcement via Regulatory Information Service
this inside information is now considered to be in the public
domain.
ENDS
A copy of the annual report will shortly be submitted to the
National Storage Mechanism and will be available for inspection at
www.morningstar.co.uk/uk/NSM
The annual report will also shortly be available on the
Company's website at www.jpmbrazil.co.uk where up to date
information on the Company, including daily NAV and share prices,
factsheets and portfolio information can also be found.
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
FR EAXPPEEKNEFF
(END) Dow Jones Newswires
August 08, 2019 13:12 ET (17:12 GMT)
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