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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Jpmorgan Emerging Markets Investment Trust Plc | LSE:JMG | London | Ordinary Share | GB00BMXWN182 | ORD 2.5P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.80 | 0.77% | 104.20 | 103.80 | 104.20 | 104.60 | 103.40 | 103.80 | 1,636,853 | 16:22:31 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Mgmt Invt Offices, Open-end | 20.13M | -1.91M | -0.0016 | -651.25 | 1.23B |
TIDMJMG
RNS Number : 5351X
JPMorgan Emerging Mkts Invest Trust
22 February 2017
LONDON STOCK EXCHANGE ANNOUNCEMENT
JPMORGAN EMERGING MARKETS INVESTMENT TRUST PLC
UNAUDITED HALF YEAR RESULTS FOR THE SIX MONTHSED
31ST DECEMBER 2016
Chairman's Statement
Performance
The first half of the Company's financial year was a positive period for emerging markets investors. Over the six months to 31st December 2016 the Company's benchmark index, the MSCI Emerging Markets Index (in sterling terms), rose 13.0%.
For the same period, the Company produced a total return on net assets of +7.4%. Whilst this is a significant underperformance against our benchmark, it follows a period of exceptional outperformance. Our Investment Manager continues to focus on quality growth stocks and the portfolio is underweight in the more cyclical stocks in energy and resources. Therefore, in a period where these cyclical stocks performed well, the portfolio lagged behind the benchmark. Such periods of underperformance are to be expected from time to time but I would emphasise that the Investment Manager's impressive long term performance record remains intact, the Company having outperformed the benchmark index over two, three, five and ten years to 31st December 2016.
The return to shareholders over the first half of the financial year was higher, at +10.2%. This reflects a narrowing of the discount at which the Company's shares trade, from 13.2% as at 30th June 2016 to 11.7% at the half year end. A review of the Company's performance for the first six months and the outlook for the remainder of the year is provided in the Investment Manager's Report which follows.
Discount
During the first six months of this financial year, the discount on the Company's shares to their net asset value ranged between 9.6% and 14.0%, averaging 12.1%. At the period end, the discount was 11.7%.
The Board's policy on discount management remains unchanged - it is prepared to take action to try to ensure that the discount does not exceed 10.0% for an extended period, but only if the discount is out of line with our peer group and market conditions are orderly. During the six months the Company repurchased a total of 550,402 shares into Treasury at an average discount of 12.1% and a total cost of GBP3.8 million, though that was insufficient to move the discount down to levels the Board feels appropriate.
The Board
Nigel Kenny retired at the conclusion of the AGM held in November 2016. Richard Laing has succeeded him as chairman of the Audit Committee and Anatole Kaletsky has become the Senior Independent Director.
Ruary Neill was appointed a Director of the Company with effect from 1st January 2017. He worked in investment banking for 28 years where he most recently managed the multi asset sales business at UBS Investment Bank. Prior to that he spent a number of years working in the Asian Equity Markets for UBS Investment Bank and Schroder Securities. He is Chairman of The Investment Committee, Great Ormond Street Children's Charity and a member of The Advisory Council, The SOAS China Institute, London University.
As previously advised, I will stand down from the Board at the conclusion of the 2017 AGM, having been a Director of your Company for fifteen years. The Board has agreed that Sarah Arkle will succeed me as Chairman and I am sure she will prove to be an excellent choice.
Outlook
The start of the new calendar year has seen further progress by emerging markets, supported by some signs of economic progress as well as recovery in commodity markets. I need hardly add that uncertainties have increased in the post-Trump world, especially with regard to international trade so we must expect some volatility in the months ahead. Nevertheless, valuations are reasonable and the long term case for emerging markets remains solid.
Alan Saunders
Chairman
22nd February 2017
Investment Manager's Report
In last year's half year report, I addressed a period in which the Company's net asset value per share had decreased, yet done better than our benchmark index. This time, the opposite has happened; while the Company's NAV per share has increased by 7.4%, we have failed to keep up with the index, which rose by 13% over the last half year.
Such an outcome, while not welcome from our point of view, will inevitably happen from time to time, as I sought to explain in the Company's last annual report. I had hoped that my comments would not prove so immediately prophetic. We know, however, and will continue to affirm, that an outcome which differs from the benchmark is necessary if we are to add value to the Company in the long term; this means that sometimes the Company's portfolio will do worse. Shareholders should always expect that I will try to learn from individual mistakes which have affected performance, but not that I will significantly alter the investment approach that we have followed for more than twenty years, when such periods occur.
Why has this been a challenging time? Obviously part of the answer lies in the tumultuous political events of 2016, which have brought great uncertainty for investors in terms of trade and other aspects of economic policy. We do not really know what the new regimes will bring. Higher inflation, which was not widely expected a year ago, has implications for commodity prices, for the US dollar, for interest rates and for all kinds of macro-economic factors which affect the valuation of equities in emerging markets and elsewhere. Similarly, big changes in trade policy and tariffs can have consequences for exporters everywhere. One particular event which bears brief comment is the startling decision taken last November in India to cancel a significant part of the money in circulation in the country, in an attempt to demonetise the economy - in other words, to force the large informal cash economy to move into the formal financial system. This is likely to be very good for the Indian economy in the long term, reducing graft, increasing tax and helping productivity; but the abruptness with which it was announced produced a short term economic squeeze which did affect share prices and had a visible impact on our investment results; I believe this will prove to be only a temporary effect. But I do not want to use politics as an excuse; in recent months your Company's portfolio has, not unusually, lagged somewhat in a period when share prices have risen and cyclical sectors have been among the best performing areas. As well as our investments in India, some of the leading contributors to underperformance have been stable businesses in sectors like consumer staples, whose share prices have not moved much; conversely, sectors like energy and materials, which we do not find appealing on a long term view and where the portfolio has little exposure, have rallied sharply as investors have begun to think about the prospect of rising inflation ahead.
In general, however, I should emphasise that I put much more store by the achievements and results of the businesses that are owned in the portfolio than I do in trying to second guess macroeconomic trends. I believe that we have a collection of strong, and in many cases outstanding, businesses in the portfolio; in general they have continued to deliver good results in the last six months and I think they can continue to do so in the future. Unless their share prices are at very elevated levels, which I do not believe to be the case, I am happy to continue to own them.
Austin Forey
Investment Manager
22nd February 2017
Interim Management Report
The Company is required to make the following disclosures in its half year report:
Principal Risks and Uncertainties
The principal risks and uncertainties faced by the Company have not changed and fall into the following broad categories: investment underperformance; political, economic and governance; loss of investment team or investment manager; share price discount; change of corporate control of the manager; legal and regulatory; corporate governance and shareholder relations; operational and cyber crime; and financial. Information on each of these areas is given in the Business Review within the Annual Report and Accounts for the year ended 30th June 2016.
Related Parties Transactions
During the first six months of the current financial year, no transactions with related parties have taken place which have materially affected the financial position or the performance of the Company.
Going Concern
The Directors believe, having considered the Company's investment objectives, risk management policies, capital management policies and procedures, nature of the portfolio and expenditure projections, that the Company has adequate resources, an appropriate financial structure and suitable management arrangements in place to continue in operational existence for the forseeable future and more specifically, that there are no material uncertainties pertaining to the Company that would prevent its ability to continue in such operational existence for at least twelve months from the date of the approval of the half year financial report. For these reasons, they consider there is reasonable evidence to continue to adopt the going concern basis in preparing the accounts.
Directors' Responsibilities
The Board of Directors confirms that, to the best of its knowledge:
(i) the condensed set of financial statements contained within the half yearly financial report has been prepared in accordance with FRS 104 'Interim Financial Reporting' and gives a true and fair view of the state of affairs of the Company and of the assets, liabilities, financial position and net return of the Company, as at 31st December 2015, as required by the UK Listing Authority Disclosure and Transparency Rules 4.2.4R; and
(ii) the interim management report includes a fair review of the information required by 4.2.7R and 4.2.8R of the UK Listing Authority Disclosure and Transparency Rules.
In order to provide these confirmations, and in preparing these financial statements, the Directors are required to:
-- select suitable accounting policies and then apply them consistently; -- make judgements and accounting estimates that are reasonable and prudent;
-- state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
-- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business;
and the Directors confirm that they have done so.
For and on behalf of the Board
Alan Saunders
Chairman
22nd February 2017
Statement of Comprehensive Income
for the six months ended 31st December 2016
(Unaudited) (Unaudited) (Audited) Six months ended Six months ended Year ended 31st December 2016 31st December 2015 30th June 2016 Revenue Capital Total Revenue Capital Total Revenue Capital Total GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 ---------------------- --------- -------- -------- --------- ---------- ---------- -------- -------- -------- Gains/(losses) on investments held at fair value through profit or loss - 66,201 66,201 - (59,173) (59,173) - 91,226 91,226 Net foreign currency gains - 1,139 1,139 - 59 59 - 4,723 4,723 Income from investments 8,373 - 8,373 6,054 - 6,054 16,978 - 16,978 Interest receivable and similar income 71 - 71 40 - 40 141 - 141 ---------------------- --------- -------- -------- --------- ---------- ---------- -------- -------- -------- Gross return/(loss) 8,444 67,340 75,784 6,094 (59,114) (53,020) 17,119 95,949 113,068 Management fee (1,424) (3,322) (4,746) (1,203) (2,806) (4,009) (2,406) (5,613) (8,019) Other administrative expenses (793) - (793) (664) - (664) (1,326) - (1,326) ---------------------- --------- -------- -------- --------- ---------- ---------- -------- -------- -------- Net return/(loss) on ordinary activities before finance costs and taxation 6,227 64,018 70,245 4,227 (61,920) (57,693) 13,387 90,336 103,723 Finance costs - (1) (1) - - - - - - ---------------------- --------- -------- -------- --------- ---------- ---------- -------- -------- -------- Net return/(loss) on ordinary activities before taxation 6,227 64,017 70,244 4,227 (61,920) (57,693) 13,387 90,336 103,723 Taxation (715) - (715) (439) - (439) (1,251) - (1,251) ---------------------- --------- -------- -------- --------- ---------- ---------- -------- -------- -------- Net return/(loss) on ordinary activities after taxation 5,512 64,017 69,529 3,788 (61,920) (58,132) 12,136 90,336 102,472 ---------------------- --------- -------- -------- --------- ---------- ---------- -------- -------- -------- Return/(loss) per share (note 4) 4.38p 50.86p 55.24p 2.95p (48.21)p (45.26)p 9.49p 70.63p 80.12p
All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued in the period.
The 'Total' column of this statement is the profit and loss account of the Company and the 'Revenue' and 'Capital' columns represent supplementary information prepared under guidance issued by The Association of Investment Companies.
The net return/loss on ordinary activities after taxation represents the profit/(loss) for the period and also the total comprehensive income.
Statement of Changes in Equity
for the six months ended 31st December 2016
Called up Capital share Share redemption Other Capital Revenue capital premium reserve reserve reserves reserve(1) Total GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 ---------------------- -------- --------- ----------- -------- ---------- ----------- ---------- Six months ended 31st December 2016 (Unaudited) At 30th June 2016 33,091 173,657 1,665 69,939 634,869 21,421 934,642 Repurchase of shares into Treasury - - - - (3,837) - (3,837) Net return on ordinary activities - - - - 64,017 5,512 69,529 Dividend paid in the period - - - - - (11,324) (11,324) ---------------------- -------- --------- ----------- -------- ---------- ----------- ---------- At 31st December 2016 33,091 173,657 1,665 69,939 695,049 15,609 989,010 ---------------------- -------- --------- ----------- -------- ---------- ----------- ---------- Six months ended 31st December 2015 (Unaudited) At 30th June 2015 33,091 173,657 1,665 69,939 557,345 16,992 852,689 Repurchase of shares into Treasury - - - - (1,089) - (1,089) Net (loss)/return on ordinary activities - - - - (61,920) 3,788 (58,132) Dividend paid in the period - - - - - (7,707) (7,707) ---------------------- -------- --------- ----------- -------- ---------- ----------- ---------- At 31st December 2015 33,091 173,657 1,665 69,939 494,336 13,073 785,761 ---------------------- -------- --------- ----------- -------- ---------- ----------- ---------- Year ended 30th June 2016 (Audited) At 30th June 2015 33,091 173,657 1,665 69,939 557,345 16,992 852,689 Repurchase of shares into Treasury - - - - (12,812) - (12,812) Net return on ordinary activities - - - - 90,336 12,136 102,472 Dividend paid in the year - - - - - (7,707) (7,707) ---------------------- -------- --------- ----------- -------- ---------- ----------- ---------- At 30th June 2016 33,091 173,657 1,665 69,939 634,869 21,421 934,642 ---------------------- -------- --------- ----------- -------- ---------- ----------- ----------
(1) This reserve forms the distributable reserve of the Company and may be used to fund distribution of profits to investors via dividend payments.
Statement of Financial Position
at 31st December 2016
(Unaudited) (Unaudited) (Audited) 31st December 31st December 30th June 2016 2015 2016 GBP'000 GBP'000 GBP'000 ------------------------------ -------------- -------------- ---------- Fixed assets Investments held at fair value through profit or loss 983,311 750,872 901,025 Current assets Debtors 1,176 3,966 2,771 Cash and cash equivalents(1) 5,436 32,168 31,052 ------------------------------ -------------- -------------- ---------- 6,612 36,134 33,823 Current liabilities Creditors: amounts falling due within one year (913) (1,245) (206) ------------------------------ -------------- -------------- ---------- Net current assets 5,699 34,889 33,617 ------------------------------ -------------- -------------- ---------- Total assets less current liabilities 989,010 785,761 934,642 ------------------------------ -------------- -------------- ---------- Net assets 989,010 785,761 934,642 ------------------------------ -------------- -------------- ---------- Capital and reserves Called up share capital 33,091 33,091 33,091 Share premium 173,657 173,657 173,657 Capital redemption reserve 1,665 1,665 1,665 Other reserve 69,939 69,939 69,939 Capital reserves 695,049 494,336 634,869 Revenue reserve 15,609 13,073 21,421 ------------------------------ -------------- -------------- ---------- Total equity shareholders' funds 989,010 785,761 934,642
------------------------------ -------------- -------------- ---------- Net asset value per share (note 5) 787.3p 612.7p 740.8p
(1) This line item combines the two lines of 'Investment in liquidity fund held at fair value through profit or loss' and 'Cash and short term deposits' in the financial statements for the half year ended 31st December 2015 into one. Under FRS 102, liquidity funds are considered cash equivalents as they are held for cash management purposes.
Statement of Cash Flows
for the six months ended 31st December 2016
(Unaudited) (Unaudited) (Audited) Six months ended Six months ended Year ended 31st December 2016 31st December 2015 30th June 2016 GBP'000 GBP'000 GBP'000 ----------------------------------------------------------- ------------------- ------------------- --------------- Net cash outflow from operations before dividends and interest (note 6) (4,437) (3,003) (4,648) Dividends received 9,291 7,744 15,694 Interest received 68 39 141 Overseas tax recovered (23) 56 57 Interest paid (1) - - ----------------------------------------------------------- ------------------- ------------------- --------------- Net cash inflow from operating activities 4,898 4,836 11,244 ----------------------------------------------------------- ------------------- ------------------- --------------- Purchases of investments (40,097) (10,897) (20,794) Sales of investments 24,004 13,643 28,918 Settlement of foreign currency contracts 39 67 (37) ----------------------------------------------------------- ------------------- ------------------- --------------- Net cash (outflow)/inflow from investing activities (16,054) 2,813 8,087 ----------------------------------------------------------- ------------------- ------------------- --------------- Dividends paid (11,324) (7,707) (7,707) Repurchase of shares into Treasury (3,150) - (12,812) ----------------------------------------------------------- ------------------- ------------------- --------------- Net cash outflow from financing activities (14,474) (7,707) (20,519) ----------------------------------------------------------- ------------------- ------------------- --------------- Decrease in cash and cash equivalents (25,630) (58) (1,188) ----------------------------------------------------------- ------------------- ------------------- --------------- Cash and cash equivalents at start of period 31,052 32,219 32,219 Exchange movements 14 7 21 Cash and cash equivalents at end of period 5,436 32,168 31,052 ----------------------------------------------------------- ------------------- ------------------- --------------- Decrease in cash and cash equivalents (25,630) (58) (1,188) ----------------------------------------------------------- ------------------- ------------------- --------------- Cash and cash equivalents consist of: Cash and short term deposits 1,354 909 697 Cash held in JPMorgan US Dollar Liquidity Fund 4,082 31,259 30,355 ----------------------------------------------------------- ------------------- ------------------- --------------- Total 5,436 32,168 31,052 ----------------------------------------------------------- ------------------- ------------------- ---------------
Notes to the Financial Statements
for the six months ended 31st December 2016
1. Financial statements
The information contained within the financial statements in this half year report has not been audited or reviewed by the Company's auditors.
The figures and financial information for the year ended 30th June 2016 are extracted from the latest published financial statements of the Company and do not constitute statutory accounts for that year. Those financial statements have been delivered to the Registrar of Companies and including the report of the auditors which was unqualified and did not contain a statement under either section 498(2) or 498(3) of the Companies Act 2006.
2. Accounting policies
The financial statements are prepared 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 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.
FRS 104, 'Interim Financial Reporting', issued by the Financial Reporting Council ('FRC') in March 2015 has been applied in preparing this condensed set of financial statements for the six months ended 31st December 2016.
All of the Company's operations are of a continuing nature.
The accounting policies applied to this condensed set of financial statements are consistent with those applied in the financial statements for the year ended 30th June 2016.
3. Dividends paid (Unaudited) (Unaudited) (Audited) Six months ended Six months ended Year ended 31st December 2016 31st December 2015 30th June 2016 GBP'000 GBP'000 GBP'000 ------------------------------------------ ------------------- ------------------- --------------- 2016 Final dividend of 9.0p (2015: 6.0p) 11,324 7,707 7,707 ------------------------------------------ ------------------- ------------------- --------------- Total dividends paid in the period/year 11,324 7,707 7,707 ------------------------------------------ ------------------- ------------------- ---------------
All dividends paid and declared in the period have been funded from the Revenue Reserve.
4. Return/(loss) per share (Unaudited) (Unaudited) (Audited) Six months ended Six months ended Year ended 31st December 2016 31st December 2015 30th June 2016 GBP'000 GBP'000 GBP'000 -------------------------------------------------------- ------------------- ------------------- --------------- Return/(loss) per share is based on the following: Revenue return 5,512 3,788 12,136 Capital return/(loss) 64,017 (61,920) 90,336 -------------------------------------------------------- ------------------- ------------------- --------------- Total return/(loss) 69,529 (58,132) 102,472 -------------------------------------------------------- ------------------- ------------------- --------------- Weighted average number of Ordinary shares in issue (excluding shares held in Treasury) 125,881,804 128,447,289 127,893,440 Revenue return per share 4.38p 2.95p 9.49p Capital return/(loss) per share 50.86p (48.21)p 70.63p -------------------------------------------------------- ------------------- ------------------- --------------- Total return/(loss) per share 55.24p (45.26)p 80.12p -------------------------------------------------------- ------------------- ------------------- --------------- 5. Net asset value per share (Unaudited) (Unaudited) (Audited) Six months ended Six months ended Year ended 31st December 2016 31st December 2015 30th June 2016
Net assets (GBP'000) 989,010 785,761 934,642 Number of shares in issue 125,624,301 128,248,376 126,174,703 --------------------------- ------------------- ------------------- --------------- Net asset value per share 787.3p 612.7p 740.8p --------------------------- ------------------- ------------------- ---------------
6. Reconciliation of net return/(loss) on ordinary activities before finance costs and taxation to net cash outflow from operations before dividends and interest
(Unaudited) (Unaudited) (Audited) Six months ended Six months ended Year ended 31st December 2016 31st December 2015 30th June 2016 GBP'000 GBP'000 GBP'000 -------------------------------------------------------- ------------------- ------------------- --------------- Net return/(loss) on ordinary activities before finance costs and taxation 70,245 (57,693) 103,723 (Less capital return)/add capital loss on ordinary activities before finance costs and taxation (64,018) 61,920 (90,336) Decrease in accrued income and other debtors 1,546 2,198 20 Increase/(decrease) in accrued expenses 27 (116) (60) Overseas withholding tax (643) (480) (1,286) Management fee charged to capital (3,322) (2,806) (5,613) Dividends received (9,291) (7,744) (15,694) Interest received (68) (39) (141) Realised gain on liquidity transactions 1,689 1,772 4,655 Realised (loss)/gain on foreign exchange transactions (602) (15) 84 -------------------------------------------------------- ------------------- ------------------- --------------- Net cash outflow from operations before dividends and interest (4,437) (3,003) (4,648) -------------------------------------------------------- ------------------- ------------------- --------------- 7. Fair valuation of investments
The fair value hierarchy disclosures required by FRS 102 are given below.
(Unaudited) (Unaudited) (Audited) Six months ended Six months ended Year ended 31st December 2016 31st December 2015 30th June 2016 Assets Liabilities Assets Liabilities Assets Liabilities GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 ---------------------------- --------- ------------ -------- ------------ -------- ------------ Level 1 983,311 - 750,872 - 901,025 - ---------------------------- --------- ------------ -------- ------------ -------- ------------ Total value of investments 983,311 - 750,872 - 901,025 - ---------------------------- --------- ------------ -------- ------------ -------- ------------
For further information, please contact:
Jonathan Latter
For and on behalf of
JPMorgan Funds Limited, Secretary 020 7742 4000
Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.
JPMORGAN FUNDS LIMITED
ENDS
A copy of the half year will be submitted to the National Storage Mechanism and will shortly be available for inspection at www.morningstar.co.uk/uk/NSM
The half year will also shortly be available on the Company's website at www.jpmemergingmarkets.co.uk here 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 company news service from the London Stock Exchange
END
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(END) Dow Jones Newswires
February 22, 2017 03:52 ET (08:52 GMT)
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