JPMorgan Brazil Investment Trust Final Results for the year ended 30 April 2017 (4208L)

TIDMJPB

RNS Number : 4208L

JPMorgan Brazil Investment Trust

18 July 2017

LONDON STOCK EXCHANGE ANNOUNCEMENT

JPMORGAN BRAZIL INVESTMENT TRUST PLC

FINAL RESULTS FOR THE YEARED

30TH APRIL 2017

chairman's statement

Introduction and Performance

The financial year to 30th April 2017 started with Brazil's equity market performing very strongly as economic and political sentiment improved. The Company also performed strongly over the period and recorded a total return on net assets of +44.0%, compared with the performance of the benchmark, the MSCI Brazil 10/40 Index of +44.5%. The share price return to shareholders of +38.6% reflected the widening of the share price discount from 10.6% to 14.0% over the year. At the time of writing this report, it stood at 16.7%.

The investment managers provide a detailed commentary on the markets and portfolio activity in their report.

Revenue and Dividends

Gross revenue for the year amounted to GBP983,000 (2016: GBP683,000) and net total revenue after administrative expenses and taxation amounted to GBP380,000 (2016: GBP212,000).

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 0.80p per share. Subject to shareholders' approval at the forthcoming Annual General Meeting ('AGM') on 14th September 2017, the dividend will be payable on 22nd September 2017 to shareholders on the register at 25th August 2017.

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 2017, net cash represented 3.1% of the Company's assets.

Share Repurchases

At last year's AGM and at the General Meeting in March this year, shareholders granted Directors authority to repurchase the Company's shares. During the financial year, the Company repurchased a total of 11,650,000 shares into Treasury at a discount, thereby marginally enhancing the net asset value per share. The Board's objective remains to use the share repurchase authority to manage imbalances between the supply and demand of the Company's shares, thereby reducing the volatility of the discount. The Board believes this mechanism has been helpful 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.

As announced in January 2017, the Board has adopted a flexible buyback strategy that takes into account the sentiment to emerging market funds as well as the absolute level of the Company's own discount and prevailing general market conditions. However, over the longer term, the Board will seek to ensure that the Company's shares should not trade at a discount in excess of approximately 10% to ex-income net asset value. This long term discount target will be reviewed periodically in the light of prevailing market conditions. The discount triggered tender mechanism will no longer be proposed because the Board believes that it is no longer in the best interests of shareholders as a whole to adopt a rigid discount control mechanism that seeks to target a defined maximum discount level regardless of general market conditions, the size of the Company and in particular, sentiment to emerging markets.

Annual General Meeting

The Company's sixth AGM will be held on 14th September 2017 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

Despite renewed political challenges, Brazil is also brimming with opportunities. Foreign investors have been returning to emerging markets, and the Brazilian government has focussed on social security and labour reforms that will, if achieved, have a positive effect on the markets and the economy. The labour reform bill has now been approved in the Senate and the forthcoming presidential and congressional elections, due in 2018, should provide a further opportunity to pursue structural reforms. The Board continues to believe that the long term case for investing in Brazil remains valid and that the Brazilian market contains many well-run companies which it expects to perform strongly as the country benefits from a stabilisation of the economy. The Board believes that the Company benefits from a well resourced and highly experienced investment management team that remains focused on a disciplined long-term investment approach to achieve superior medium to long-term returns for shareholders from a high conviction portfolio.

Howard Myles

Chairman

18th July 2017

Investment managers' report

Market review

The start of the review period saw Brazilian equities benefit from improving sentiment, boosted by a stabilising political landscape and appreciating currency. The much anticipated impeachment of Dilma Rousseff in August 2016, and the subsequent appointment of Michel Temer as president was welcomed by investors. Following his appointment, the new government began pushing through much-needed unpopular reforms and reducing government expenditure, resulting in an improvement in the political climate.

Meanwhile, the macroeconomic backdrop began to show tentative signs of stabilisation. Unemployment continued to rise, but inflation started to ease, leading to expectations that interest rates would soon begin to come down at a sharper pace. However, in November the US election led to uncertainty in the market, with equity prices across the Latin American region as a whole suffering following Donald Trump's victory. This is despite the Brazilian economy having no trade treaties with the US and the weakness reflected broader concerns over the direction of US policy rather than any specific Brazilian issues.

Moving into 2017, Brazilian equities continued their strong performance, supported by commodity prices that rose in response to improved global growth prospects, the strengthening Brazilian real vs. the US dollar, and the central bank's decision to continue cutting interest rates to 11.25% by the end of the review period on the back of decelerating inflation.

The market was relatively subdued from February until the end of the review period, as a depreciating currency and weaker-than-expected fourth-quarter GDP data, showing a 0.9% year-on-year fall, weighed on equity prices that had up to that point enjoyed a prolonged period of growth from lows hit in early 2016.

Portfolio review

Against this backdrop, the Company's net asset value and share price rose strongly in the review period, performing in line with the benchmark. Stock selection contributed positively to performance, while asset allocation detracted.

The top contributor to performance when reviewed on a stock-by-stock basis was an overweight position in Fleury; a provider of medical services including health testing. The company has gone through a major turnaround process, which started in late 2015 and which has seen a significant increase in profitability. In the review period, the company benefited from improving profit margins, reflecting efforts within the business to reduce costs and improve efficiencies. In addition to these internal changes, Fleury continued to deliver solid growth, reflecting an increase in the overall size of its market driven by demographic change and increasing health consciousness, as well as market share gains, helped by the strength of its brands. We expect margins to continue to improve reflecting further work to streamline operations and the recently-announced expansion plan to open between 70 and 90 new patient service centres over the next five years.

At the sector level, our consumer discretionary exposure delivered positive returns, in particular our position in Smiles, which runs one of the largest loyalty programmes in Brazil. The company, which was spun off from low-cost airline GOL's frequent flyer programme, continues to grow even as its competitors struggle, and has been improving margins while at the same time enhancing the travel offerings in its loyalty programme.

Turning to detractors from performance, the holding that has done the greatest damage to returns over the year has been our position in Valid, a stock that is not represented in the Company's benchmark index. The payment and identity company's operations suffered more than expected both domestically, where Brazilians delayed renewing their ID documentation due to a weak economy, and internationally, where its operations in the US also faced challenges. We have revised our numbers, but the company's management remains focused on turning the company around. We therefore maintain our position given its long-term potential as economic growth returns.

Elsewhere, not owning Petrobras detracted from relative performance. The change of management and a focus on improving the balance sheet though efforts to reduce bank debt improved investor sentiment towards the scandal-hit state-owned oil producer and suggested it was on the path to becoming more of a private-sector corporation than an arm of government.

More recently, however, the stock weakened along with the global energy sector. When viewed as a whole, the energy sector reported its worst first-quarter performance in history, which has gone some way to mitigating the negative contribution from not holding Petrobras.

Given the strong run in commodity prices, our underweight exposure to materials damaged performance, notably our underweight position in Vale. Despite increasing our position in the company, we remained underweight relative to the benchmark and so suffered, as Vale performed well on the back of a resilient iron ore price. Elsewhere in the materials sector, our exposure to the pulp and paper producer Suzano detracted from returns. The company underperformed as the negative effects of a strengthening Brazilian real outweighed any positive benefit from improving pulp prices.

Improving sentiment towards Brazilian equities led to positioning changes over the review period. At the beginning, when we were cautious on Brazil, we had a significant portion - close to 9% - of the trust allocated to names outside Brazil. We have trimmed this off-benchmark allocation, selling certain positions while maintaining those with positive momentum, meaning that today we have only 3% invested outside of Brazil.

Other changes included trimming our position in brewer Anheuser-Busch InBev following weak results earlier in the review period. The proceeds of this sale were used to increase our positions in banks, which we then rotated away from late in the review period. They were also invested into the commodity sector, and into a couple of small-cap names, such as travel agency CVC. Late in 2016, we also added to our position in Cielo, a leading payment system operator in Latin America, after the stock fell on the back of fears that a more stringent regulatory environment would be negative for profits. Given the valuation level and our reassessment of the investment case, we viewed price weakness as a buying opportunity.

Our exposure remains tilted in favour of domestic themes, especially domestic cyclicals, in anticipation of better growth ahead. We believe the strong relative performance enjoyed by mega-cap commodity-oriented names where we have been underweight may be coming to an end, and we are comfortable with our limited exposure here.

Outlook

The Brazilian economy is likely to grow this year, but the implementation of the reform programme may be delayed given reports in May of alleged government corruption centred on President Temer. However, it is important to remember that Brazil is coming out of the deepest recession in decades. The political uncertainty clearly weighs on investor confidence and could also limit the extent to which domestic interest rates may fall. Despite this, operational leverage, lower interest rates and the positive momentum in GDP should be reflected in double-digit earnings growth. First-quarter earnings have already shown a positive trend across sectors and beyond the large commodity cyclicals, reflecting improving domestic conditions and not just increasing commodity prices.

Given the gradual improvement in fundamentals that we are seeing and the strong support for structural reform, we are more likely to view such politically-driven market dislocation as an opportunity to increase exposure to high-quality stocks that are now more attractively valued.

As a long-term investor, we continue to look for quality companies that can continue to deliver growth regardless of the political and macroeconomic environments, as we believe these companies will continue to outperform over market and business cycles.

Luis Carrillo

Sophie Bosch De Hood

Investment Managers

18th July 2017

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 tactically, 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 21 on pages 47 to 51, of the Annual Report and Accounts.

-- 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 18 to 21, of the Annual Report and Accounts.

-- 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 BNY Mellon & Depositary (UK) 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 19 and 20, of the Annual Report and Accounts.

-- 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.

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 15 of the Annual Report and Accounts, 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

Howard Myles

Chairman

18th July 2017

statement of comprehensive income

for the year ended 30th April 2017

 
                                                                        2017                          2016 
                                                             Revenue   Capital     Total   Revenue   Capital     Total 
                                                             GBP'000   GBP'000   GBP'000   GBP'000   GBP'000   GBP'000 
----------------------------------------------------------  --------  --------  --------  --------  --------  -------- 
 Gains/(losses) on investments held at fair value through 
  profit or loss                                                   -     8,587     8,587         -   (4,628)   (4,628) 
 Net foreign currency gains/(losses)                               -         2         2         -      (11)      (11) 
 Income from investments                                         981         -       981       683         -       683 
 Interest receivable and similar income                            2         -         2         -         -         - 
----------------------------------------------------------  --------  --------  --------  --------  --------  -------- 
 Gross return/(loss)                                             983     8,589     9,572       683   (4,639)   (3,956) 
 Management fee                                                (226)         -     (226)     (123)         -     (123) 
 Other administrative expenses                                 (294)         -     (294)     (300)         -     (300) 
----------------------------------------------------------  --------  --------  --------  --------  --------  -------- 
 Net return/(loss) on ordinary activities before finance 
  costs and taxation                                             463     8,589     9,052       260   (4,639)   (4,379) 
 Finance costs                                                   (2)         -       (2)       (1)         -       (1) 
----------------------------------------------------------  --------  --------  --------  --------  --------  -------- 
 Net return/(loss) on ordinary activities before taxation        461     8,589     9,050       259   (4,639)   (4,380) 
 Taxation                                                       (81)         -      (81)      (47)         -      (47) 
----------------------------------------------------------  --------  --------  --------  --------  --------  -------- 
 Net return/(loss) on ordinary activities after taxation         380     8,589     8,969       212   (4,639)   (4,427) 
----------------------------------------------------------  --------  --------  --------  --------  --------  -------- 
 Return/(loss) per share (note 3)                              0.96p    21.79p    22.75p     0.46p   (9.94)p   (9.48)p 
----------------------------------------------------------  --------  --------  --------  --------  --------  -------- 
 

All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued in the year.

The 'Total' column of this statement is the profit and loss account of the Company and the 'Revenue' and 'Capital' columns represent supplementary information prepared under guidance issued by the Association of Investment Companies. Net return/(loss) on ordinary activities after taxation represents the profit/(loss) for the year and also Total Comprehensive Income.

Statement of Changes in equity

for the year ended 30th April 2017

 
                           Called 
                               up      Capital 
                            share   redemption     Share      Other    Capital      Revenue 
                          capital      reserve   premium    reserve   reserves   reserve(1)      Total 
                          GBP'000      GBP'000   GBP'000    GBP'000    GBP'000      GBP'000    GBP'000 
-----------------------  --------  -----------  --------  ---------  ---------  -----------  --------- 
 At 30th April 
  2015                        617           13    16,149     34,970   (23,203)          721     29,267 
 Repurchase of 
  shares into Treasury          -            -         -      (873)          -            -      (873) 
 Net (loss)/return 
  from ordinary 
  activities                    -            -         -          -    (4,639)          212    (4,427) 
 Dividend paid 
  in the year                   -            -         -          -          -        (187)      (187) 
-----------------------  --------  -----------  --------  ---------  ---------  -----------  --------- 
 At 30th April 
  2016                        617           13    16,149     34,097   (27,842)          746     23,780 
 Repurchase of 
  shares into Treasury          -            -         -    (7,218)          -            -    (7,218) 
 Net return from 
  ordinary activities           -            -         -          -      8,589          380      8,969 
 Dividend paid 
  in the year                   -            -         -          -          -        (202)      (202) 
-----------------------  --------  -----------  --------  ---------  ---------  -----------  --------- 
 At 30th April 
  2017                        617           13    16,149     26,879   (19,253)          924     25,329 
-----------------------  --------  -----------  --------  ---------  ---------  -----------  --------- 
 

1 This reserve forms the distributable reserve of the Company and may be used to fund distributions of profits to investors via dividend payments.

statement of financial position

at 30th April 2017

 
                                                              2017       2016 
                                                           GBP'000    GBP'000 
-------------------------------------------------------  ---------  --------- 
 Fixed assets 
 Investments held at fair value through profit or loss      24,550     23,004 
 Current assets 
 Debtors                                                       163        169 
 Cash and cash equivalents                                     705        697 
-------------------------------------------------------  ---------  --------- 
                                                               868        866 
 Creditors: amounts falling due within one year 
 Creditors                                                    (89)       (90) 
-------------------------------------------------------  ---------  --------- 
 Net current assets                                            779        776 
-------------------------------------------------------  ---------  --------- 
 Total assets less current liabilities                      25,329     23,780 
-------------------------------------------------------  ---------  --------- 
 Net assets                                                 25,329     23,780 
-------------------------------------------------------  ---------  --------- 
 Capital and reserves 
 Called up share capital                                       617        617 
 Capital redemption reserve                                     13         13 
 Share premium                                              16,149     16,149 
 Other reserve                                              26,879     34,097 
 Capital reserves                                         (19,253)   (27,842) 
 Revenue reserve                                               924        746 
-------------------------------------------------------  ---------  --------- 
 Shareholders' funds                                        25,329     23,780 
-------------------------------------------------------  ---------  --------- 
 Net asset value per share (note 4)                          74.2p      51.9p 

-------------------------------------------------------  ---------  --------- 
 

statement of cash flows

for the year ended 30th April 2017

 
                                                                       2017      2016 
                                                                    GBP'000   GBP'000 
----------------------------------------------------------------  ---------  -------- 
 Net cash outflow from operations before dividends and interest       (537)     (471) 
 Dividends received                                                     915       662 
 Interest received                                                        1         - 
 Interest paid                                                          (2)       (1) 
----------------------------------------------------------------  ---------  -------- 
 Net cash inflow from operating activities                              377       190 
----------------------------------------------------------------  ---------  -------- 
 Purchases of investments                                          (13,259)   (6,269) 
 Sales of investments                                                20,283     7,195 
 Settlement of foreign currency contracts                                27       (2) 
----------------------------------------------------------------  ---------  -------- 
 Net cash inflow from investing activities                            7,051       924 
----------------------------------------------------------------  ---------  -------- 
 Dividend paid                                                        (202)     (187) 
 Repurchase of shares into Treasury                                 (7,218)     (873) 
----------------------------------------------------------------  ---------  -------- 
 Net cash outflow from financing activities                         (7,420)   (1,060) 
----------------------------------------------------------------  ---------  -------- 
 Increase in cash and cash equivalents                                    8        54 
----------------------------------------------------------------  ---------  -------- 
 Cash and cash equivalents at start of year                             697       652 
 Exchange movements                                                       -       (9) 
 Cash and cash equivalents at end of year                               705       697 
----------------------------------------------------------------  ---------  -------- 
 Increase in cash and cash equivalents                                    8        54 
----------------------------------------------------------------  ---------  -------- 
 Cash and cash equivalents consist of: 
 Cash and short term deposits                                           596       697 
 Cash held in JPMorgan US Dollar Liquidity Fund                         109         - 
----------------------------------------------------------------  ---------  -------- 
 Total                                                                  705       697 
----------------------------------------------------------------  ---------  -------- 
 

Notes to the financial statements

for the year ended 30th April 2017

   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 January 2017.

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 20 of the Directors' Report, within the Annual Report and Accounts, form part of these financial statements.

The policies applied in these financial statements are consistent with those applied in the preceding year.

   2.     Dividends 
   (a)   Dividends paid and proposed 
 
                                                            2017      2016 
                                                         GBP'000   GBP'000 
 -----------------------------------------------------  --------  -------- 
  2016 dividend paid of 0.50p (2015: 0.40p) per share        202       187 
 -----------------------------------------------------  --------  -------- 
  Dividend proposed of 0.80p (2016: 0.50p) per share         273       229 
 -----------------------------------------------------  --------  -------- 
 

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 2016 amounted to GBP229,000. However the actual payment amounted to GBP202,000 due to shares repurchased and held in Treasury, between the date at which financial statements were issued and the date on which the dividend was paid.

The final dividend proposed in respect of the year ended 30th April 2017 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 2018.

(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 GBP380,000 (2016: GBP212,000). The revenue reserve after payment of the final dividend will amount to GBP651,000 (2016: GBP517,000).

 
                                                        2017      2016 
                                                     GBP'000   GBP'000 
 -------------------------------------------------  --------  -------- 
  Final dividend of 0.80p (2016: 0.50p) per share        273       229 
 -------------------------------------------------  --------  -------- 
  Minimum dividend required for s1158 purposes           233       110 
 -------------------------------------------------  --------  -------- 
 
   3.     Return/(loss) per share 
 
                                                                        2017         2016 
                                                                     GBP'000      GBP'000 
 --------------------------------------------------------------  -----------  ----------- 
  Revenue return                                                         380          212 
  Capital return/(loss)                                                8,589      (4,639) 
 --------------------------------------------------------------  -----------  ----------- 
  Total return/(loss)                                                  8,969      (4,427) 
 --------------------------------------------------------------  -----------  ----------- 
  Weighted average number of shares in issue during the period    39,423,033   46,660,058 
  Revenue return per share                                             0.96p        0.46p 
  Capital return/(loss) per share                                     21.79p      (9.94)p 
 --------------------------------------------------------------  -----------  ----------- 
  Total return/(loss) per share                                       22.75p      (9.48)p 
 --------------------------------------------------------------  -----------  ----------- 
 
   4.     Net asset value per share 
 
                                     2017         2016 
 ---------------------------  -----------  ----------- 
  Net assets (GBP'000)             25,329       23,780 
  Number of shares in issue    34,124,854   45,774,854 
  Net asset value per share         74.2p        51.9p 
 ---------------------------  -----------  ----------- 
 
   5.     Status of results announcement 

2016 Financial Information

The figures and financial information for 2016 are extracted from the published Annual Report and Accounts for the year ended 30th April 2016 and do not constitute the statutory accounts for that year. The Annual Report and Accounts have been delivered to the Registrar of Companies and included the Report of the Independent Auditors which was unqualified and did not contain a statement under either section 498(2) or section 498(3) of the Companies Act 2006.

2017 Financial Information

The figures and financial information for 2017 are extracted from the Annual Report and Accounts for the year ended 30th April 2017 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.

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

18th July 2017

For further information:

Divya Amin

   JPMorgan Funds Limited   020 7742 4000 

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.

JPMORGAN FUNDS LIMITED

This information is provided by RNS

The company news service from the London Stock Exchange

END

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July 18, 2017 10:47 ET (14:47 GMT)