JPMorgan Glb Emerging Mkts Inc Tst Final Results (3560Q)

TIDMJEMI

RNS Number : 3560Q

JPMorgan Glb Emerging Mkts Inc Tst

18 October 2019

LONDON STOCK EXCHANGE ANNOUNCEMENT

JPMORGAN GLOBAL EMERGING MARKETS INCOME TRUST PLC

FINAL RESULTS FOR THE YEARED 31ST JULY 2019

Legal Entity Identifier: 549300OPJXU72JMCYU09

Information disclosed in accordance with DTR 4.2.2

CHAIRMAN'S STATEMENT

Performance

I am delighted to present my first annual statement as Chairman of the Company and report on a rewarding year for shareholders.

The year to 31st July 2019 was another positive one for investors in emerging markets leading to a rise in our benchmark, the MSCI Emerging Markets Index with net dividends reinvested (in sterling terms), of +4.8%. Against this positive background our Investment Managers were able to add further to returns through favourable stock selection, with the result that the total return on net assets was +11.9%. The total return to shareholders was +18.5% reflecting the narrowing of the share price discount to net asset value from 6.4% to 1.0%. Since year-end, the Company's share price has decreased to 132.0p at the time of writing.

The Investment Managers' Report that follows provides more detail on the Company's investment strategy and performance. The Board recognises the wide difference between the total return on net assets and the performance of the benchmark. The Company's income objective means that the composition of the portfolio is significantly different to the composition of the benchmark index. This means that the pattern of returns may, in any given period, vary meaningfully from the benchmark index, which the Board understands and accepts.

Revenue and Dividends

Gross revenue for the year amounted to GBP22.3 million (2018: GBP21.4 million) with net revenue of GBP17.6 million (2018: GBP17.1 million). Net revenue return per ordinary share for the year, calculated on the average number of shares in issue, was 5.92p (2018: 5.78p).

In the current financial year, the Board paid three interim dividends of 1.0p per share and has announced the payment of a fourth interim dividend of 2.1p per share. This brings the total dividend for the year to 5.1p per share, a 2% increase from last year. The Board continues the approach of paying four interim dividends, reflecting the support we have received from shareholders for a regular and timely income stream. The Board is seeking shareholder authority to continue this dividend payment policy for the Company at the forthcoming Annual General Meeting ('AGM').

As shareholders are aware, the Company receives dividends in the currencies of developing countries and US dollars, but pays dividends in sterling. It has not been the Company's policy to hedge currency risk as that is expensive and, for many currencies, impracticable. That policy inevitably means that the Company's asset values and cash flows will be adversely or favourably affected by currency movements from time to time.

Share Capital

During the year, the share price traded occasionally at a premium to net asset value. The Company issued 450,000 new shares for a total consideration of GBP599,000. The impact of the share issuances on the NAV was immaterial. Since the year end, the Company has not issued any shares.

The Company did not carry out any share repurchases during the year nor since the year end.

The Board is seeking shareholder authority at the forthcoming AGM to have the flexibility to issue up to a further 10% of the Company's issued share capital. The intention is to use this authority to meet demand for the Company's shares when they trade at an appropriate premium to net asset value.

Key Performance Indicators ('KPIs')

The Board tracks a series of KPIs. Further details may be found on page 16 of the Annual Report. The Board pays particular attention to performance, ongoing charges, gearing, income available to pay dividends and the investment risk of the portfolio.

Gearing

The Company has two US $20 million fixed rate loan facilities with NAB, repayable in October 2020 (2.31% per annum) and November 2022 (3.28% per annum). As at 31st July 2019, gearing stood at 5.9% (2018: 6.2%).

Management Fee

The Board is pleased to report that with effect from 1st August 2019, JPMorgan has agreed to charge their management fees based on the Company's net assets rather than on total assets less current liabilities. Therefore, all loans drawn down under the loan facility will be deducted for the purpose of the management fee calculation.

The Board and Corporate Governance

As previously reported, Andrew Hutton retired from the Board at the conclusion of the last AGM on 27th November 2018. Richard Robinson assumed the role of Chairman of the Nomination Committee and became the Senior Independent Director.

Following the Board's annual evaluation by the Nomination Committee, it felt that its current composition and size is sufficient at the present time and no further changes are anticipated over the next 12 months. The Board has a plan to refresh the Board in an orderly manner over time. Therefore, as part of its long term succession planning and to ensure continuity, the Board will seek to recruit a new non-executive Director in early 2021.

The Board supports annual re-election for all Directors, as recommended by the UK Corporate Governance Code, and therefore all of the Directors will stand for re-election at the forthcoming Annual General Meeting. Shareholders who wish to contact the Chairman or other members of the Board may do so through the Company Secretary or the Company's website, details of which appear below.

As detailed in the Investment Managers' report, environmental, social and governance ('ESG') considerations are integral to the Investment Managers' investment process. The Board shares the Investment Managers' view of the importance of ESG when making investments that are sustainable over the long term and the necessity of continued engagement with investee companies throughout the duration of the investment.

Annual General Meeting

The Annual General Meeting will be held at on Thursday, 28th November 2019 at 2.00 p.m. 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. It would be helpful if shareholders seeking answers to detailed questions put them in writing beforehand, addressed to the Company Secretary at JPMorgan Funds Limited, 60 Victoria Embankment, London EC4Y 0JP. Alternatively, questions may be submitted via the Company's website (www.jpmglobalemergingmarketsincome.co.uk). Shareholders who are unable to attend the Annual General Meeting in person are encouraged to use their proxy votes. Proxy votes may be lodged electronically, whether shares are held through CREST or in certificate form and full details are set out on the form of proxy.

Outlook

The Board is cognisant of the increasing number of emerging economic, social and geopolitical concerns which may cause anxiety to investors. Slowing economies, ongoing trade tensions between the US and China regarding goods tariffs and the uncertainties surrounding Brexit are amongst the issues which may result in further market volatility in the near term. The Board recognises these challenges and remains confident that the Investment Managers are well positioned and resourced to identify companies with good prospects for dividend generation, growth potential and resilient financial characteristics which are capable of achieving strong long-term performance for shareholders.

Sarah Fromson

Chairman

17(th) October 2019

INVESTMENT MANAGERS' REPORT

Performance review - strong performance against a backdrop of rising trade tensions

The Company delivered positive performance for the review period - both in absolute and relative terms. Over the year to 31 July 2019, the Company's return on net assets was 11.9%, outperforming its benchmark, the MSCI Emerging Markets Index, which rose by 4.8% (on a total return (net) basis, in sterling terms). The value of the Company's shares (including dividends) rose by 18.5% over the period. Judicious stock picking contributed positively to returns over the year.

For the first half of the review period, markets were turbulent, amidst signals of weakening global growth and elevated geopolitical uncertainty, not least surrounding the simmering trade tensions between the world's two largest economies, the United States and China. These concerns did not evaporate in the second half of the year and the trade tussles continued; by the end of the period, this damaging dispute appeared no closer to resolution than it had been a year earlier. Nevertheless, emerging market equities were able to make progress in the second half of the Company's year and market sentiment improved, largely as a result of the US Federal Reserve adopting a dovish monetary policy, cutting interest rates in an effort to reduce market volatility and stave off recession. A number of central banks around the world, including in emerging markets, followed suit.

Given the ongoing uncertainty throughout the 12-month period, albeit with less market turmoil in the second half of the year than the first, we are pleased that our stock picking contributed meaningfully to the Company delivering a strong set of annual results and outperforming the index by some considerable margin.

Spotlight on stocks, markets, sectors and countries

In this section we highlight specific factors that have impacted portfolio performance (both positively and negatively) over the year.

China (including Hong Kong) remains our largest country exposure. The Chinese economy has been challenged on numerous fronts, with domestic industrial output growth falling to its slowest pace since February 2002 whilst retail sales growth also weakened. However, certain industrial indicators suggest recent, if tentative, signs of recovery, with production edging upwards. Despite continued US trade tension uncertainty and the political disturbance in Hong Kong, China was a key contributor to performance, primarily through stock selection where we identified interesting long-term opportunities, particularly in consumer-orientated China A-share stocks. Of note were our positions in electrical appliance manufacturer Midea, dairy products producer Inner Mongolia Yili and life insurance companies such as China Pacific Insurance.

China Resources Power was a notable performance detractor. It not only performed poorly but also disappointed in terms of its dividend pay-out. In spite of it having been one of our larger positions, we have a strict process discipline to sell stocks when they deliver a specific pay-out disappointment like this and we did so on this occasion.

Taiwan is our second largest country exposure - and our largest country overweight position relative to the Company's benchmark. Given our emphasis on identifying stocks that generate dividends, we appreciate the positive dividend culture in this market and Taiwanese stocks have been key contributors to performance. These include our largest stock holding, Taiwan Semiconductor Manufacturing (TSMC) which is the world's largest contract chipmaker. TSMC reported positive quarterly earnings in July as well as forecasting stronger demand for the second half of the year, which helped to assuage earlier concerns around lower smartphone growth and Huawei-related weakness.

Mexican equities were volatile over the review period, reflecting the negative economic outlook and ongoing uncertainty about government policy and political disagreements within the government itself. Nevertheless, our stock selection in Mexico added value and is a positive example of how our focus on income-yielding stocks can be helpful. For example, Kimberly-Clark de Mexico performed well for us, benefiting from a fall in pulp prices towards the end of the review period. It is also a dependable dividend payer.

Our South African holdings detracted from overall returns, driven by weakness in global and emerging markets as well as South Africa's own economic troubles and political infighting. A generally softer economy constrained stocks and held back names we hold including brand promoter AVI and Vodacom.

By sector, Financials was the most important contributor to performance. This remains the Company's largest sector weighting, on both an absolute and a relative basis. Our stock selection within the sector was positive and the top five performance contributors from the entire portfolio were all Financials. One of these was Russia's largest bank Sberbank, which has delivered record profits in recent years, amid Russia's recession and subsequent sluggish recovery. It announced a record high dividend for 2018 (representing 33% growth in the value of dividends per share) and continued on its track of increasing its dividend pay-out ratio - a positive factor for us.

Uncovering sustainable businesses that have good dividend growth prospects

The Company's approach, which is to invest in a diversified portfolio of high yield and high profitability stocks to receive dividends from across sectors and countries, has not changed. We continue to find many stocks that look attractive from a dividend perspective. The revenue numbers on page 44 of the Annual Report show that for this financial year the earnings per share of the Company increased from 5.78p to 5.92p. However we recognise that the weakness of sterling over the year was a key factor (via currency translation). In fact the underlying businesses in the portfolio faced challenges during the year (e.g. with China slowdown and global trade issues as discussed above) and struggled to grow dividends in local terms. The overall outcome in terms of business results was frustrating this year though we continue to have a positive view of the underlying companies in the portfolio.

Overall, with the increase in earnings per share over the year, as discussed in the Chairman's Statement, this allowed for an increase in the dividend paid as well as a further increase in the Company's revenue reserves. Revenue reserves are important as they could be used to help support dividend payments in future years, if there were to be a period when dividend receipts from portfolio companies were weaker.

Portfolio changes

Portfolio changes over the year have been relatively modest, consistent with our policy of investing for the long term and benefiting from the continued dividend streams of the companies we hold.

We continue to see China as an area of opportunity where we can best deliver the Company's diversified income and capital growth strategy. During the volatile first half of the review period we identified several Chinese stock opportunities. As the market declined, we made meaningful portfolio additions, adding to both Chinese A-shares as well as to Hong Kong-listed China stocks, thereby taking advantage of better valuations to increase our overall China weighting. Although we have subsequently trimmed some of these names after a strong run, our percentage of Chinese investments held has increased year-on-year.

Our more recent portfolio changes have been stock-specific decisions rather than based on any broader sector/country selection. Market weakness and negative sentiment towards information technology names provided us with opportunities to add to some favoured names, such as TSMC.

We added to TSMC after its share price weakened, following the negative narrative around the Chinese telecoms provider Huawei, which is a major buyer of TSMC's chips. Our overall view is that although individual customers can face specific issues such as this, the strength of the TSMC ecosystem, and its competitive advantages versus its peers, mean that the company will continue to be in a strong position going forward to generate attractive levels of profitability. TSMC is also typical of Taiwan's positive dividend culture, having recently announced plans to introduce sustainable quarterly dividends.

We also added to another Taiwanese holding, Vanguard International Semiconductor Corporation. We have grown increasingly positive on this business, notably its tilt towards attractive areas of the semiconductor industry (such as power management chips). It has expanded capacity to meet growing demand - and allow incremental growth - while also continuing to demonstrate a desire to deliver a consistent stream of dividends.

In terms of sales, we referred earlier to China Resources Power, which we exited due to its dividend payout disappointment. As we place so much store in understanding dividend policies before buying a stock, these kinds of disappointments are relatively rare. The two other reasons for us to sell stocks are: (a) a recognition that the fundamentals of the business are worse than we had thought previously; and (b) higher valuations (and lower dividend yields) which signal lower returns in the future. Valuation-driven sales tend to be incremental (i.e. relatively slowly over time as the valuation increases) but one example of a stock which we completely exited on this basis during the period was Petrobras Distribudora, the fuel distribution subsidiary of Petrobras in Brazil, which we sold after a strong move in the shares had taken the dividend yield down to less attractive levels.

Our engagement on Environmental, Social and Governance (ESG) issues

We pay particular attention to issues that could affect the prospects for stocks within the Company's portfolio. We believe strongly that ESG considerations (particularly Governance) need to be a foundation of any investment process supporting long-term investing and that corporate policies at odds with environmental and social issues are not sustainable in the long run.

We draw a direct link between the dividend policies of companies and our views on governance, i.e. a direct demonstration of a desire to return cash to shareholders is a tangible and positive governance indicator. We have discussed this issue with many companies over time - good examples would include our engagement with many Korean corporates which typically have relatively low pay-out ratios compared with those of other Emerging Markets.

We have also engaged with management teams of investee companies on a variety of other ESG issues. For example, during the year we undertook a review of environmental and social risks amongst textile companies in Asia, asking questions about areas such as emissions, waste management and labour practices. We asked management teams about this as well as studying the requirements their own customers put on them. Overall we were reassured by our findings; where there were negative issues highlighted we are satisfied that the suppliers are working (sometimes together with their brand customers) to remedy the situation. In our view, manufacturers with good technology, scale and ESG practices are the ones we expect to gain market share over time.

Outlook

We remain in uncertain economic, market and political territory. Stock markets have recovered strongly since the beginning of 2019 but remain vulnerable to negative news flow, while economic growth indicators have stumbled and global manufacturing output is weaker than it has been for several years.

We continue to believe that, going forward, the most important short-term risks to progress are global growth remaining sluggish, a stubbornly-strong US dollar and, of course, the trade collisions between the US and China - which are far from resolved.

These all weigh heavily on the prospects for a global economy already in the doldrums and are reflected in weakening corporate performance across emerging markets. Central banks around the world have stepped in with monetary easing measures and, in the US, rates look much more likely to fall than rise for the remainder of the year. Such intervention may soften the landing for global economies, but to varying degrees.

Investors are fearful that a global recession could be on the horizon and certain 'end of cycle' signals in the United States and other developed nations support this opinion. If it does happen, emerging market economies will not be immune to a global slowdown. A so-called 'Goldilocks Scenario' ('not too hot, not too cold') for the US would be the ideal economic outcome for emerging markets. But even if that does not ensue, we take solace from the fact that emerging markets economies face fewer imbalances now than they did during previous economic slowdowns.

Following the slowest growth in China's modern era, we are yet to see Chinese authorities really step up their efforts to support domestic demand through targeted fiscal measures and monetary easing by the People's Bank of China. Given that China has been cited as one of the primary sources of the global slowdown, such policy measures could boost growth not just domestically but around the world.

Although the investing backdrop looks more challenging, we have a positive view about the long-term prospects for dividend generation from the stocks held in the portfolio. However, whilst we are positive about long-term prospects we remind shareholders that the company receives dividends in local currencies and US dollars but pays dividends in sterling (which could be volatile depending on, for example, developments around Brexit). As such, movements in sterling will have an impact on the value of dividend payments.

We adopt a long-term view in analysing dividends and profitability drivers and the portfolio is positioned to capture this. The Company invests in stocks that can generate earnings and cash flow to pay out dividends and also to reinvest in the future of their own businesses.

We remain focused on investing in sound businesses that have the potential to deliver income and capital returns. Our aim is that the Company should continue to have a grounded approach and a balanced risk profile that will deliver good returns and reward shareholders willing to invest for the long term.

Omar Negyal

Jeffrey Roskell

Amit Mehta

Investment Managers

17(th) October 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. In assessing the risks and how they can be mitigated, the Board has given particular attention to those issues that threaten the viability of the Company. These key risks fall broadly under the following categories:

   --   Investment 

an inappropriate investment strategy, for example poor stock selection or asset allocation or foreign exchange weakness, may lead to underperformance against the Company's benchmark index and peer companies. Insufficient local currency income generation which may lead to a cut in the dividend. The Board manages these risks by diversification of investments through its investment restrictions and guidelines, which are monitored and reported on by the Manager. The Manager provides the Directors with timely and accurate management information, including performance data and attribution analyses, revenue estimates, currency performance, liquidity reports and shareholder analyses. The Board monitors the implementation and results of the investment process with the Investment Managers, who attend Board meetings, and reviews data which show statistical measures of the Company's risk profile.

   --   Strategy 

Inappropriate gearing leading to sub-optimal returns or lack of opportunity from under-gearing. The Board has set a gearing range within which the Investment Managers employ the Company's gearing strategically. If the Company's business strategy is no longer appropriate, it may lead to a lack of investor demand. This may result in the Company's shares trading at a narrower premium or a wider discount. The Board discusses these risks regularly and takes advice from the Manager and its professional advisers.

   --   Financial 

the financial risks faced by the Company include market price risk, interest rate risk, liquidity risk and credit risk. Further details are disclosed in note 22 on pages 58 to 63 of the Annual Report.

   --   Corporate Governance and Shareholder Relations 

Details of the Company's compliance with Corporate Governance best practice, including information on relations with shareholders, are set out in the Corporate Governance report on pages 24 to 28 of the Annual Report.

   --   Operational 

Loss of key staff by the Manager, such as the Investment Managers, could affect the performance of the Company. Disruption to, or failure of, the Manager's accounting, dealing or payments systems or the depositary's or custodian's records could prevent accurate reporting and monitoring of the Company's financial position. This includes the risk of cybercrime and consequent potential threat to security and business continuity. 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 in the Risk Management and Internal Control section of the Corporate Governance report on page 27 of the Annual Report.

   --   Accounting, Legal and Regulatory 

in order to qualify as an investment trust, the Company must comply with Section 1158 of the Corporation Tax Act 2010 ('Section 1158'). Details of the Company's approval are given under 'Business of the Company' above. Were the Company to breach Section 1158, it would lose its 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 reported to 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 Prospectus Rules, Listing Rules and Disclosure, Guidance & Transparency Rules ('DTRs'). 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, the UKLA Prospectus Rules, Listing Rules, DTRs and the Alternative Investment Fund Managers Directive.

   --   Political and Economic 

Sustained underperformance of emerging markets as an asset class as a result of risks such as the imposition of restrictions on the free movement of capital and change in legislation. Currently, there are UK-related risks due to the uncertain outcome of the 'Brexit' process and a possible change of Government. These risks are discussed by the Board on a regular basis.

   --   Environmental, Social and Governance 

Underperformance as a result of environmental, social and governance risks. The Board acknowledges that there are risks associated with investment in companies which fail to conduct business in a responsible manner and therefore, it ensures that the Manager takes account of environmental, social and governance factors as part of the investment process.

Transactions with the Manager and related parties

Full details of transactions with the manager and related parties can be found in note 6 on pages 60 and 61 of the Annual Report.

Statement of Directors' Responsibilities

The Directors are responsible for preparing the annual report and the financial statements 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 and applicable law) including FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under Company law the Directors must not approve the financial statements unless they are satisfied that, taken as a whole, the annual report and financial statements 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 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 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.

The Directors are responsible for keeping proper 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 to 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 financial statements are published on the www.jpmglobalemergingmarketsincome.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 auditors 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 financial statements since they were initially presented on the website. The financial statements 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 Directors' Report, Strategic Report and Directors' Remuneration Report that comply with that law and those regulations.

Each of the Directors, whose names and functions are listed on page 21 of the Annual Report confirm 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 of the Company; and

-- the Strategic Report includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces.

The Board confirms that it is satisfied that the annual report and financial statements taken as a whole is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company's position and performance, business model and strategy.

For and on behalf of the Board

Sarah Fromson

Chairman

17(th) October 2019

statement of comprehensive income

for the year ended 31st July 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                                                        -    33,262    33,262          -     12,019    12,019 
 Net foreign currency losses                                     -   (1,746)   (1,746)          -      (674)     (674) 
 Income from investments                                    22,199         -    22,199     21,358          -    21,358 
 Interest receivable and similar income                         75         -        75         61          -        61 
--------------------------------------------------------  --------  --------  --------  ---------  ---------  -------- 
 Gross return                                               22,274    31,516    53,790     21,419     11,345    32,764 
 Management fee                                            (1,257)   (2,934)   (4,191)    (1,281)    (2,988)   (4,269) 
 Other administrative expenses                               (725)         -     (725)      (740)          -     (740) 
--------------------------------------------------------  --------  --------  --------  ---------  ---------  -------- 
 Net return before finance costs and taxation               20,292    28,582    48,874     19,398      8,357    27,755 
 Finance costs                                               (279)     (651)     (930)      (231)      (537)     (768) 
--------------------------------------------------------  --------  --------  --------  ---------  ---------  -------- 
 Net return before taxation                                 20,013    27,931    47,944     19,167      7,820    26,987 
 Taxation                                                  (2,440)       195   (2,245)    (2,073)          -   (2,073) 
--------------------------------------------------------  --------  --------  --------  ---------  ---------  -------- 
 Net return after taxation                                  17,573    28,126    45,699     17,094      7,820    24,914 
--------------------------------------------------------  --------  --------  --------  ---------  ---------  -------- 
 Return per share (note 2)                                   5.92p     9.47p    15.39p      5.78p      2.64p     8.42p 
 

statement of changes in equity

for the year ended 31st July 2019

 
                           Called 
                               up                 Capital 
                            share      Share   redemption          Other    Capital      Revenue 
                          capital    premium      reserve   reserve(1,2)   reserves   Reserve(2)       Total 
                          GBP'000    GBP'000      GBP'000        GBP'000    GBP'000      GBP'000     GBP'000 
-----------------------  --------  ---------  -----------  -------------  ---------  -----------  ---------- 
 At 31st July 2017          2,943    218,497           13        101,113     51,154       11,727     385,447 
 Shares reissued from 
  Treasury                      -         81            -              -        122            -         203 
 Issue of new ordinary 
  shares                       25      3,410            -              -          -            -       3,435 
 Net return                     -          -            -              -      7,820       17,094      24,914 
 Dividends paid in 
  the year (note 3)             -          -            -              -          -     (14,485)    (14,485) 
-----------------------  --------  ---------  -----------  -------------  ---------  -----------  ---------- 
 At 31st July 2018          2,968    221,988           13        101,113     59,096       14,336     399,514 
 Issue of new ordinary 
  shares                        5        594            -              -          -            -         599 
 Net return                     -          -            -              -     28,126       17,573      45,699 
 Dividends paid in 
  the year (note 3)             -          -            -          (508)          -     (14,336)    (14,844) 
-----------------------  --------  ---------  -----------  -------------  ---------  -----------  ---------- 
 At 31st July 2019          2,973    222,582           13        100,605     87,222       17,573     430,968 
-----------------------  --------  ---------  -----------  -------------  ---------  -----------  ---------- 
 

(1) The balance of the share premium was cancelled on 20th October 2010 and transferred to the 'other reserve'.

(2) This reserve forms the distributable reserve of the Company and may be used to fund distributions to investors via dividend payments.

statement of financial position

at 31st July 2019

 
                                                                2019        2018 
                                                             GBP'000     GBP'000 
---------------------------------------------------------  ---------  ---------- 
 Fixed assets 
 Investments held at fair value through profit or loss       456,203     424,209 
---------------------------------------------------------  ---------  ---------- 
 Current assets 
 Derivative financial assets                                       -           8 
 Debtors                                                       1,364       2,760 
 Cash and cash equivalents                                     6,314       4,275 
---------------------------------------------------------  ---------  ---------- 
                                                               7,678       7,043 
 Current liabilities 
 Creditors: amounts falling due within one year                (245)     (1,244) 
---------------------------------------------------------  ---------  ---------- 
 Net current assets                                            7,433       5,799 
---------------------------------------------------------  ---------  ---------- 
 Total assets less current liabilities                       463,636     430,008 
 Creditors: amounts falling due after more than one year    (32,668)    (30,494) 
---------------------------------------------------------  ---------  ---------- 
 Net assets                                                  430,968     399,514 
---------------------------------------------------------  ---------  ---------- 
 Capital and reserves 
 Called up share capital                                       2,973       2,968 
 Share premium                                               222,582     221,988 
 Capital redemption reserve                                       13          13 
 Other reserve                                               100,605     101,113 
 Capital reserves                                             87,222      59,096 
 Revenue reserve                                              17,573      14,336 
---------------------------------------------------------  ---------  ---------- 
 Total shareholders' funds                                   430,968     399,514 
---------------------------------------------------------  ---------  ---------- 
 Net asset value per share                                    145.0p      134.6p 
 

statement of cash flows

For the year ended 31st July 2019

 
                                                                       2019         2018 
                                                                    GBP'000      GBP'000 
----------------------------------------------------------------  ---------  ----------- 
 Net cash outflow from operations before dividends and interest     (4,547)      (5,515) 
 Dividends received                                                  20,832       18,467 
 Interest received                                                       69           59 
 Overseas tax recovered                                                   -           28 
 Interest paid                                                        (880)        (768) 
----------------------------------------------------------------  ---------  ----------- 
 Net cash inflow from operating activities                           15,474       12,271 
----------------------------------------------------------------  ---------  ----------- 
 Purchases of investments                                          (59,570)    (150,252) 
 Sales of investments                                                60,316      151,535 
 Settlement of forward currency contracts                                48         (29) 
----------------------------------------------------------------  ---------  ----------- 
 Net cash inflow from investing activities                              794        1,254 
----------------------------------------------------------------  ---------  ----------- 
 Dividends paid                                                    (14,844)     (14,485) 
 Shares reissued from Treasury                                            -          203 
 Issue of new ordinary shares                                           599        3,435 
 Repayment of bank loans                                                  -     (14,994) 
 Drawdown of bank loans                                                   -       14,994 
----------------------------------------------------------------  ---------  ----------- 
 Net cash outflow from financing activities                        (14,245)     (10,847) 
----------------------------------------------------------------  ---------  ----------- 
 Increase in cash and cash equivalents                                2,023        2,678 
----------------------------------------------------------------  ---------  ----------- 
 Cash and cash equivalents at start of year                           4,275        1,605 
 Exchange movements                                                      16          (8) 
 Cash and cash equivalents at end of year                             6,314        4,275 
----------------------------------------------------------------  ---------  ----------- 
 Increase in cash and cash equivalents                                2,023        2,678 
----------------------------------------------------------------  ---------  ----------- 
 Cash and cash equivalents consist of: 
 Cash and short term deposits                                         2,185        2,062 
 Cash held in JPMorgan US Dollar Liquidity Fund                       4,129        2,213 
----------------------------------------------------------------  ---------  ----------- 
 Total                                                                6,314        4,275 
----------------------------------------------------------------  ---------  ----------- 
 

Notes to the financial statements

for the year ended 31st July 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 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                                                     17,573        17,094 
  Capital return                                                     28,126         7,820 
 ------------------------------------------------------------  ------------  ------------ 
  Total return                                                       45,699        24,914 
 ------------------------------------------------------------  ------------  ------------ 
  Weighted average number of shares in issue during the year    296,892,079   295,938,380 
  Revenue return per share                                            5.92p         5.78p 
  Capital return per share                                            9.47p         2.64p 
 ------------------------------------------------------------  ------------  ------------ 
  Total return per share                                             15.39p         8.42p 
 ------------------------------------------------------------  ------------  ------------ 
 
   3.     Dividends 

Dividends paid and declared

 
                                                               2019      2018 
                                                            GBP'000   GBP'000 
 --------------------------------------------------------  --------  -------- 
  Dividend paid 
  2018 Fourth interim dividend paid of 2.0p (2017: 1.9p)      5,936     5,589 
  First interim dividend paid of 1.0p (2018: 1.0p)            2,968     2,960 
  Second interim dividend paid of 1.0p (2018: 1.0p)           2,968     2,968 
  Third interim dividend paid of 1.0p (2018: 1.0p)            2,972     2,968 
 --------------------------------------------------------  --------  -------- 
  Total dividends paid in the year                           14,844    14,485 
 --------------------------------------------------------  --------  -------- 
  Dividend declared 
  Fourth interim dividend declared of 2.1p (2018: 2.0p)       6,242     5,936 
 --------------------------------------------------------  --------  -------- 
 
   4.     Net asset value per share 
 
                                      2019           2018 
 ---------------------------  ------------  ------------- 
  Net assets (GBP'000)             430,968        399,514 
  Number of shares in issue    297,240,161    296,790,161 
 ---------------------------  ------------  ------------- 
  Net asset value per share         145.0p         134.6p 
 ---------------------------  ------------  ------------- 
 
   5.     Status of announcement 

2018 Financial Information

The figures and financial information for 2018 are extracted from the Annual Report and Accounts for the year ended 31st July 2018 and do not constitute the statutory accounts for that year. The Annual Report and Accounts has been delivered to the Registrar of Companies and included the Report of the Independent Auditors which was unqualified and did not contain a statement under either section 498(2) or section 498(3) of the Companies Act 2006.

2019 Financial Information

The figures and financial information for 2019 are extracted from the Annual Report and Accounts for the year ended 31st July 2019 and do not constitute the statutory accounts for that year. The Annual Report and Accounts includes the Report of the Independent Auditors which is unqualified and does not contain a statement under either section 498(2) or section 498(3) of the Companies Act 2006. The Annual Report and Accounts will be delivered to the Registrar of Companies in due course.

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

17th October 2019

For further information please contact:

Divya Amin

For and on behalf of

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 be available on the Company's website at www.jpmorganglobalemergingmarkets.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 [e-mail] or visit www.rns.com.

END

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October 18, 2019 02:45 ET (06:45 GMT)