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Share Name Share Symbol Market Type Share ISIN Share Description
Jpmorgan Smaller Companies Investment Trust Plc LSE:JMI London Ordinary Share GB00BF7L8P11 ORD 5P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  +0.00p +0.00% 220.00p 218.00p 222.00p 219.00p 215.00p 219.00p 63,171 16:35:06
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Equity Investment Instruments 0.0 5.2 30.7 7.2 37.45

JPMorgan Smaller Cos IT PLC Half-year Report

26/03/2019 10:47am

UK Regulatory (RNS & others)


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JPMorgan Smaller Cos IT PLC

26 March 2019

LONDON STOCK EXCHANGE ANNOUNCEMENT

JPMORGAN SMALLER COMPANIES INVESTMENT TRUST PLC

UNAUDITED HALF YEAR RESULTS FOR THE SIX MONTHSED

31ST JANUARY 2019

Legal Entity Identifier: 549300PXALXKUMU9JM18

Information disclosed in accordance with DTR 4.2.2

CHAIRMAN'S STATEMENT

Performance and discount

When I wrote to shareholders in October, commenting on the Company's annual results to 31st July 2018, I referred to the difficult domestic and international political and economic backdrop that was making its presence felt at that time. Whilst noting that shareholders had achieved very attractive returns over the annual review period, the Board felt that the Company's immediate prospects could be more uncertain, and that growing geopolitical turbulence may be a significant headwind to its short-term future performance. Six months on, this has turned out to be the case as the fourth quarter of 2018 was a challenging time for both UK and global markets.

The 2018 calendar year will be looked back on as one of heightened volatility across global stock markets. Slowing economic growth, US-China trade tensions and rising US interest rates are just three of the issues that have alarmed investors. Closer to home, Brexit uncertainty has weighed on the valuations of UK stocks which have remained broadly out of favour, with smaller innovative company share prices lagging their larger counterparts. The fourth quarter of 2018 was a period of significant volatility in individual shares, particularly for small companies, and this has adversely affected the overall performance of the Company's portfolio.

It is disappointing to report that performance has not matched the strong absolute and relative returns enjoyed by shareholders in each of the two previous financial years. The total return on the Company's net assets during the six months to 31st January 2019 was -16.1% compared with the benchmark return of -8.3%, a composite of the new benchmark, the Numis Smaller Companies plus AIM (excluding Investment Companies) Index and the old benchmark, the FTSE Small Cap Index (excluding Investment Trusts). The new index has been the benchmark since 1st January 2019, having replaced the FTSE Small Cap (excluding Investment Trusts) Index as being more suitably aligned with the Company's revised investment objectives and policy.

The share price discount to net asset value narrowed over the period from 14.7% to 11.9%. This contributed towards a better outcome for shareholders, which was a return of -13.0%.

Following approval from shareholders at the Annual General Meeting ('AGM'), on the 30th November 2018 there was a sub-division of the Company's ordinary shares of 25p each into 5 ordinary shares of 5p each. This did not affect the overall value of their holdings in the Company as each Shareholder will hold the same proportionate interest in the Company following the completion of the share split as before. However, it is intended to make it easier for shareholders to make small or regular investments in the Company and to improve shareholder liquidity.

Since 31st January 2019, the Company's total return on net assets was +3.4%, marginally outperforming the Company's benchmark index which rose by 2.37% as at 21st March 2019. Over the same period, the Company delivered a return to ordinary shareholders of -0.3%.

The Investment Managers have provided a more detailed commentary on markets and portfolio performance in their Report.

Loan Facility and Gearing

The Company has a highly flexible borrowing facility of GBP25 million in place with Scotiabank until April 2019. There is a further option to increase borrowings to GBP35 million subject to certain conditions. This has been reviewed by the Board and we have decided to renew the facility with Scotiabank for a further six months.

During a period of low interest rates, the use of gearing is an attractive way of amplifying the effect of rising markets, but inevitably increases the risk of loss if markets fall. In the recent past, the Company has maintained a fairly constant level of gearing, with the Board giving the Investment Managers flexibility to adjust the gearing tactically within guidelines. During the reporting period, the Company's gearing ranged from 5.9% to 10.0%, ending the half year at 5.9% geared, reflecting a more cautious outlook. As at 21st March 2019 the Company's gearing was 5.0%, with total borrowings of GBP22.0 million.

On 20th September 2018, the Board announced that it was considering the possibility of issuing Convertible Unsecured Loan Stock (CULS), subject to consultation with shareholders. The aim was to provide the Company with structural, long term gearing and the potential to grow the Company in future upon conversion into ordinary shares. However, in the light of recent market developments and prolonged uncertainty around Brexit negotiations, the Board has decided to delay its plans, awaiting a period of greater certainty.

Share buybacks

During the six months to 31st January 2019 the Company repurchased 16,319 shares for cancellation at a cost of GBP190,000. These shares were acquired at an average discount of 15.1% enhancing net asset value per share by 0.2 pence. Our objective remains to reduce the volatility of the discount, and our action during this period demonstrates the Board's aim to act in the best interests of shareholders by making purchases should supply and demand for shares become unbalanced.

Following the AGM in November 2018, any shares repurchased will either be cancelled or held in Treasury for possible re-issue. There are currently no shares held in Treasury.

Board succession

As noted in the previous Annual Report, Andrew Impey will take over from me as Chairman of the Company following my retirement at the AGM in November 2019. This internal appointment will provide continuity for both the Board and the Company in the future.

Looking further ahead, the Board's next priority is to appoint a successor to the Audit Committee Chairman, Andrew Robson, who will retire from the Board at the AGM in 2020. The Board will commence the search for a suitable candidate this year.

Outlook

It is always difficult to predict short-term performance. However, we expect market conditions and investor sentiment to remain unsettled for the immediate future, extending the current period of heightened market volatility. Tensions between the US and its global trading partners are anticipated to continue to cast a shadow on current and prospective global economic growth. The domestic economy has also been held back by political risk which should lift once the outcome of Brexit becomes clear. Depending on the outcome, the greater certainty that would follow could increase enthusiasm for UK stocks that are currently so out of favour.

Investment in smaller companies requires the acceptance of a higher level of short-term risk for the opportunity of receiving good long-term returns. The Manager remains committed to identifying fundamentally sound UK smaller companies, many of which may be attractively priced at the present time. Despite recent challenges, we remain confident that the Company's portfolio is well positioned to deliver attractive returns to its shareholders over the long-term.

Michael Quicke OBE

Chairman

26th March 2019

INVESTMENT MANAGERS' REPORT

Performance and Market Background

Global growth was 3.7% in 2018, and recently reduced forecasts now look for 3.5% in 2019. The slowdown in Chinese GDP and the on-going trade dispute between China and the USA, allied with a number of interest rates rises in the USA during 2018, have been the key causes, although the level of growth still remains healthy.

In the UK, growth remained positive but pedestrian at 1.4%. Unemployment continued to fall, reaching 4% in December 2018, and inflation also declined, coming in for January 2019 at 1.8%, which is below the Bank of England's target. However, the second half of the year saw a notable rise in stock market volatility and a sharp deterioration in investor sentiment. This led to significant declines in stock markets around the world from October to December, although January 2019 saw a large rebound. In the UK, the FTSE 100 Index fell 8.4% and the FTSE Smaller Companies (ex Investment Trusts) Index was down 9.6% in the six months to January. Our new benchmark, the Numis Smaller Companies plus AIM (ex Investment Companies) Index by comparison was down 11.1%. Hardest hit was AIM, where the AIM 100 Index was down 17.2%.

The sharp decline in the stock market saw a number of companies that had performed very strongly give back a large part of their gains. In the majority of cases this was with no change to the underlying fundamentals. Likewise, having been invested in a number of these companies, which led to very strong outperformance last year, we too have given back a part of this outperformance. It is disappointing to report that your Company underperformed its benchmark during the period, with a total return on net assets of -16.1%. The discount narrowed somewhat over the period, providing a share price total return of -13.0%.

Portfolio

The very sharp fall in a number of share prices led to some significant detractors from performance over the six months. These included Fevertree, Keywords Studios and most notably Victoria, a large position which had a disappointing trading statement and has since been reduced. Positive performers included our holdings in Watkins Jones, Games Workshop and Future, but these could not offset those stocks which fell in value. In addition, our AIM exposure over the period, and our gearing, also contributed to the underperformance.

As well as significant volatility, the period under review saw your Company adopt a new benchmark. This has led to a change in some of our sector positioning, as the new Index has many more constituents and is significantly more balanced than the FTSE Smaller Companies Index (excluding Investment Trusts). Notable sub-sector overweights in the portfolio still include Financial Services, Media and Leisure Goods. However, while we remain 2% underweight in Real Estate Investment Trusts, previously the portfolio was over 10% underweight compared to the old benchmark. The sector analysis in the Half Year Report demonstrates our current positioning. There are a number of significant changes since our year end in July, due to the benchmark change. Key is the move from underweight to overweight in Financials, due to Real Estate Investment Trusts now being a much smaller portion of the Financials sector, as compared to the old index. Looking at the Technology sector, our weights and our holdings are almost unchanged, but the new benchmark contains many more technology companies, hence we have moved from overweight to underweight relative to the index. In addition, we were underweight in both the Basic Materials and Oil & Gas sectors previously. These are larger sectors in our new index, so we are now more underweight these sectors.

We made a number of changes to the portfolio in the period, as we adjusted to the new, broader benchmark, mainly adding new investments at the top end of the benchmark. New holdings included Dunelm, Dart, DFS and Ferrexpo. In the indiscriminate sell-off we also took advantage of the falling share prices of companies where we have high conviction by adding to a number of names, examples being MJ Gleeson the housebuilder and video gaming stocks such as Team 17 and Codemasters. Post the end of our half year, it is disappointing to report that our large holding in Plus500, a company we have owned for over 5 years since its IPO, had a very poor trading statement due to the impact of new industry regulations which were introduced in the Summer of 2018. This has led us to significantly reduce our position in the company. For context, since its IPO, this has been the second best contributor to our outperformance over the period, even with the recent share price fall.

Outlook

At the time of writing, the date we are due to leave the EU is imminent. Despite this, we still have no idea what that exit will look like. The situation is extremely fluid, but it now appears highly unlikely that it will take place on the 29th March. The recent strengthening of sterling suggests a more benign outcome than previous expectations - for which read a 'softer' Brexit - but currency markets have been wrong-footed before.

As we have indicated previously, our stance had been to plan, and to position the portfolio, for a 'hard' Brexit. As can be seen from some of the recent portfolio additions such as the retailers Dunelm and DFS, we have softened this approach over recent months and increased our domestic exposure. In part this action has been taken due to the decline in valuation of a number of domestic companies, but in addition recent data has shown a significant improvement in the financial position of the British worker. A key data point that we monitor, the Asda Income Tracker, showed that disposable income had risen by +5.8% year on year in December 2018. Lower inflation, very low unemployment and this significant rise in real wages should in normal times be extremely positive for consumer-facing stocks. However, a recent collapse in consumer confidence, due to Brexit uncertainties, has cast a pall. There is a clear disconnect between these two data points. If the Government is able to negotiate its way out of the current impasse, we should see sterling rise, inflation fall further and consumer confidence rebound strongly, which would be very positive for the share prices of domestic-facing companies.

Further contradictions abound at present. The UK has just been voted the world's best place to do business by Forbes magazine but according to the Bank of England UK investment intentions have collapsed in recent months. In a similar vein, while the UK is currently the fourth most popular investment target in the world, it remains out of favour with investors (a recent Bank of America Merrill Lynch fund managers' survey showed that a net 38% of global investors are underweight the UK). This is borne out by stock market valuations. The FTSE 100 index is on a price/earnings ratio of 12x for forecast earnings growth over the next year of 3%, whereas the Numis Smaller Companies plus AIM (excluding investment companies) index is priced at just over 11x P/E for forecast earnings growth of over 10% and dividend growth of almost 7%. If, and it is a big if, the UK can exit the EU gracefully, then the UK market should enjoy significant buying interest, and in particular the more domestically focussed smaller companies will reap the benefit.

Georgina Brittain

Katen Patel

Investment Managers

26th March 2019

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 significantly and fall into the following broad categories: corporate strategy; investment and performance; discount; smaller company investment; political (including Brexit) and economic; investment management team; market; accounting, legal and regulatory; corporate governance and shareholder relations; operational and cybercrime; and financial. Information on each of these areas is given in the Business Review within the Annual Report and Financial Statements for the year ended 31st July 2018.

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 during the period.

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 foreseeable 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 this 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 January 2019, 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

Michael Quicke OBE

Chairman

26th March 2019

STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHSED 31ST JANUARY 2019

 
                                     (Unaudited)                     (Unaudited)                    (Audited) 
                                  Six months ended                Six months ended                 Year ended 
                                  31st January 2019               31st January 2018              31st July 2018 
                           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 
------------------------  --------  ----------  ----------  --------  --------  --------  --------  --------  -------- 
 (Losses)/gains on 
  investments 
 held at fair value 
  through 
 profit or loss                  -    (37,967)    (37,967)         -    18,948    18,948         -    32,282    32,282 
 Net foreign currency 
 gains/(losses)                  -           5           5         -      (15)      (15)         -      (17)      (17) 
 Income from investments     3,043           -       3,043     2,247         -     2,247     6,219         -     6,219 
 Interest receivable 
  and 
 similar income                 39           -          39        12         -        12        25         -        25 
------------------------  --------  ----------  ----------  --------  --------  --------  --------  --------  -------- 
 Gross return/(loss)         3,082    (37,962)    (34,880)     2,259    18,933    21,192     6,244    32,265    38,509 
 Management fee              (272)       (633)       (905)     (276)     (644)     (920)     (558)   (1,303)   (1,861) 
 Other administrative 
  expenses                   (225)           -       (225)     (139)         -     (139)     (354)         -     (354) 
------------------------  --------  ----------  ----------  --------  --------  --------  --------  --------  -------- 
 Net return/(loss) 
  on ordinary 
 activities before 
  finance 
 costs and taxation          2,585    (38,595)    (36,010)     1,844    18,289    20,133     5,332    30,962    36,294 
 Finance costs                (57)       (133)       (190)      (40)      (94)     (134)      (94)     (220)     (314) 
------------------------  --------  ----------  ----------  --------  --------  --------  --------  --------  -------- 
 Net return/(loss) 
  on ordinary 
 activities before 
  taxation                   2,528    (38,728)    (36,200)     1,804    18,195    19,999     5,238    30,742    35,980 
 Taxation                     (40)           -        (40)      (52)         -      (52)     (233)         -     (233) 
------------------------  --------  ----------  ----------  --------  --------  --------  --------  --------  -------- 
 Net return/(loss) 
  on ordinary 
  activities after 
   taxation                  2,488    (38,728)    (36,240)     1,752    18,195    19,947     5,005    30,742    35,747 
------------------------  --------  ----------  ----------  --------  --------  --------  --------  --------  -------- 
 Return/(loss) per 
  share (note 3)(1)          3.12p    (48.63)p    (45.51)p     2.10p    21.83p    23.93p     6.14p    37.70p    43.84p 
 

(1) Comparative figures for the period ended 31st January 2018 and year ended 31st July 2018 have been restated following the sub-division of each existing ordinary share of

25p into five ordinary shares of 5p each on 30th November 2018.

STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTHSED 31ST JANUARY 2019

 
                                         Called                Capital 
                                             up 
                                          share     Share   redemption    Capital      Revenue 
                                        capital   premium      reserve   reserves   Reserve(1)       Total 
                                        GBP'000   GBP'000      GBP'000    GBP'000      GBP'000     GBP'000 
-------------------------------------  --------  --------  -----------  ---------  -----------  ---------- 
 Six months ended 31st January 
  2019 (Unaudited) 
 At 31st July 2018                        3,985    25,895        2,899    187,547        6,782     227,108 
 Repurchase and cancellation of 
  the Company's 
 own shares                                 (4)         -            4      (190)            -       (190) 
 Net (loss)/return on ordinary 
  activities                                  -         -            -   (38,728)        2,488    (36,240) 
 Dividend paid in the period (note 
  4)                                          -         -            -          -      (4,299)     (4,299) 
-------------------------------------  --------  --------  -----------  ---------  -----------  ---------- 
 At 31st January 2019                     3,981    25,895        2,903    148,629        4,971     186,379 
-------------------------------------  --------  --------  -----------  ---------  -----------  ---------- 
 Six months ended 31st January 
  2018 (Unaudited) 
 At 31st July 2017                        4,275    25,895        2,609    168,812        5,694     207,285 
 Repurchase and cancellation of 
  the Company's 
 own shares                               (290)         -          290   (12,007)            -    (12,007) 
 Net return on ordinary activities            -         -            -     18,195        1,752      19,947 
 Dividend paid in the period (note 
  4)                                          -         -            -          -      (3,917)     (3,917) 
-------------------------------------  --------  --------  -----------  ---------  -----------  ---------- 
 At 31st January 2018                     3,985    25,895        2,899    175,000        3,529     211,308 
-------------------------------------  --------  --------  -----------  ---------  -----------  ---------- 
 Year ended 31st July 2018 (Audited) 
 At 31st July 2017                        4,275    25,895        2,609    168,812        5,694     207,285 
 Repurchase and cancellation of 
  the Company's 
 own shares                               (290)         -          290   (12,007)            -    (12,007) 
 Net return on ordinary activities            -         -            -     30,742        5,005      35,747 
 Dividends paid in the year (note 
  4)                                          -         -            -          -      (3,917)     (3,917) 
-------------------------------------  --------  --------  -----------  ---------  -----------  ---------- 
 At 31st July 2018                        3,985    25,895        2,899    187,547        6,782     227,108 
-------------------------------------  --------  --------  -----------  ---------  -----------  ---------- 
 

(1) 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 JANUARY 2019

 
                                                   (Unaudited)    (Unaudited)   (Audited) 
                                                  31st January   31st January   31st July 
                                                          2019           2018        2018 
                                                       GBP'000        GBP'000     GBP'000 
-----------------------------------------------  -------------  -------------  ---------- 
 Fixed assets 
 Investments held at fair value through profit 
  or loss                                              197,392        231,904     247,785 
 Current assets 
 Debtors                                                 1,689            344       1,941 
 Cash and cash equivalents                              11,552          4,505       3,817 
-----------------------------------------------  -------------  -------------  ---------- 
                                                        13,241          4,849       5,758 
 Current liabilities 
 Creditors: amounts falling due within one 
  year                                                (24,254)       (25,445)    (26,435) 
-----------------------------------------------  -------------  -------------  ---------- 
 Net current liabilities                              (11,013)       (20,596)    (20,677) 
-----------------------------------------------  -------------  -------------  ---------- 
 Total assets less current liabilities                 186,379        211,308     227,108 
-----------------------------------------------  -------------  -------------  ---------- 
 Net assets                                            186,379        211,308     227,108 
-----------------------------------------------  -------------  -------------  ---------- 
 Capital and reserves 
 Called up share capital                                 3,981          3,985       3,985 
 Share premium                                          25,895         25,895      25,895 
 Capital redemption reserve                              2,903          2,899       2,899 
 Capital reserves                                      148,629        175,000     187,547 
 Revenue reserve                                         4,971          3,529       6,782 
-----------------------------------------------  -------------  -------------  ---------- 
 Total shareholders' funds                             186,379        211,308     227,108 
-----------------------------------------------  -------------  -------------  ---------- 
 Net asset value per share (note 5)(1)                  234.1p         265.2p      285.0p 
-----------------------------------------------  -------------  -------------  ---------- 
 

(1) Comparative figures for the period ended 31st January 2018 and year ended 31st July 2018 have been restated following the sub-division of each existing ordinary share of

25p into five ordinary shares of 5p each on 30th November 2018.

STATEMENT OF CASH FLOWS

FOR THE SIX MONTHSED 31ST JANUARY 2019

 
                                                      (Unaudited)    (Unaudited)    (Audited) 
                                                       Six months     Six months   Year ended 
                                                            ended          ended 
                                                     31st January   31st January    31st July 
                                                             2019           2018         2018 
                                                          GBP'000        GBP'000      GBP'000 
--------------------------------------------------  -------------  -------------  ----------- 
 Net cash outflow from operations before 
  dividends and 
 interest                                                 (1,164)        (1,183)      (2,309) 
 Dividends received                                         3,008          2,317        5,907 
 Interest received                                             51             53           96 
 Taxation recovered                                             -            (1)            - 
 Interest paid                                              (186)          (131)        (305) 
--------------------------------------------------  -------------  -------------  ----------- 
 Net cash inflow from operating activities                  1,709          1,055        3,389 
--------------------------------------------------  -------------  -------------  ----------- 
 Purchases of investments                                (45,975)       (38,205)     (80,826) 
 Sales of investments                                      59,490         46,269       85,868 
 Settlement of forward currency contracts                       -           (12)         (12) 
--------------------------------------------------  -------------  -------------  ----------- 
 Net cash inflow from investing activities                 13,515          8,052        5,030 
--------------------------------------------------  -------------  -------------  ----------- 
 Dividend paid                                            (4,299)        (3,917)      (3,917) 
 Repurchase and cancellation of the Company's 
  own shares                                                (190)       (12,334)     (12,334) 
 Repayment of bank loans                                  (3,000)              -            - 
 Drawdown of bank loan                                          -          3,000        3,000 
--------------------------------------------------  -------------  -------------  ----------- 
 Net cash outflow from financing activities               (7,489)       (13,251)     (13,251) 
--------------------------------------------------  -------------  -------------  ----------- 
 Increase/(decrease) in cash and cash equivalents           7,735        (4,144)      (4,832) 
--------------------------------------------------  -------------  -------------  ----------- 
 Cash and cash equivalents at start of 
  period                                                    3,817          8,649        8,649 
 Cash and cash equivalents at end of period                11,552          4,505        3,817 
--------------------------------------------------  -------------  -------------  ----------- 
 Increase/(decrease) in cash and cash equivalents           7,735        (4,144)      (4,832) 
--------------------------------------------------  -------------  -------------  ----------- 
 Cash and cash equivalents consist of: 
 Cash and short term deposits                                 286            250          250 
 Cash held in JPMorgan Sterling Liquidity 
  Fund                                                     11,266          4,255        3,567 
--------------------------------------------------  -------------  -------------  ----------- 
 Total                                                     11,552          4,505        3,817 
--------------------------------------------------  -------------  -------------  ----------- 
 

NOTES TO THE FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 31ST JANUARY 2019

   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 31st July 2018 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 have been prepared in accordance with the Companies Act 2006, FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' of the United Kingdom Generally Accepted Accounting Practice ('UK GAAP') and with the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' (the revised 'SORP') issued by the Association of Investment Companies in November 2014 and updated in February 2018.

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 January 2019.

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 31st July 2018.

   3.       Return/(loss) per share 
 
                                            (Unaudited)        (Unaudited)     (Audited) 
                                       Six months ended   Six months ended    Year ended 
                                           31st January       31st January     31st July 
                                                   2019               2018          2018 
                                                GBP'000            GBP'000       GBP'000 
------------------------------------  -----------------  -----------------  ------------ 
 Return per share is based on 
  the following: 
 Revenue return                                   2,488              1,752         5,005 
 Capital (loss)/return                         (38,728)             18,195        30,742 
------------------------------------  -----------------  -----------------  ------------ 
 Total (loss)/return                           (36,240)             19,947        35,747 
------------------------------------  -----------------  -----------------  ------------ 
 Weighted average number of 
  shares in issue(1)                         79,635,219         83,343,400    81,533,205 
 Revenue return per share(1)                      3.12p              2.10p         6.14p 
 Capital (loss)/return per share(1)            (48.63)p             21.83p        37.70p 
------------------------------------  -----------------  -----------------  ------------ 
 Total (loss)/return per share(1)              (45.51)p             23.93p        43.84p 
------------------------------------  -----------------  -----------------  ------------ 
 

(1) Comparative figures for the period ended 31st January 2018 and year ended 31st July 2018 have been restated following the sub-division of each existing ordinary share of 25p into five ordinary shares of 5p each on 30th November 2018.

   4.       Dividend paid 
 
                                     (Unaudited)        (Unaudited)    (Audited) 
                                Six months ended   Six months ended   Year ended 
                                    31st January       31st January    31st July 
                                            2019               2018         2018 
                                         GBP'000            GBP'000      GBP'000 
-----------------------------  -----------------  -----------------  ----------- 
 2018 final dividend of 5.4p 
  (2017: 4.6p(1) )                         4,299              3,917        3,917 
-----------------------------  -----------------  -----------------  ----------- 
 

All dividends paid in the period have been funded from the revenue reserve.

No interim dividend has been declared in respect of the six months ended 31st January 2019 (2018: nil).

(1) The dividend rate has been restated following the sub-division of each existing ordinary share of 25p into 5p each on 30th November 2018.

   5.       Net asset value per share 
 
                                      (Unaudited)        (Unaudited)     (Audited) 
                                 Six months ended   Six months ended    Year ended 
                                     31st January       31st January     31st July 
                                             2019               2018          2018 
------------------------------  -----------------  -----------------  ------------ 
 Net assets (GBP'000)                     186,379            211,308       227,108 
 Number of shares in issue(1)          79,611,410         79,693,005    79,693,005 
------------------------------  -----------------  -----------------  ------------ 
 Net asset value per share(1)              234.1p             265.2p        285.0p 
------------------------------  -----------------  -----------------  ------------ 
 

(1) Comparative figures for the period ended 31st January 2018 and year ended 31st July 2018 have been restated following the sub-division of each existing ordinary share of 25p into five ordinary shares of 5p each on 30th November 2018.

26th March 2019

For further information, please contact:

Lucy Dina

For and on behalf of

JPMorgan Funds Limited

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.jpmsmallercompanies.co.uk where up to date information on the Company, including daily NAV and share prices, factsheets and portfolio information can also be found.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

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