Source - RNS
RNS Number : 5052K
JPMorgan Global Growth & Income PLC
22 September 2016
 

LONDON STOCK EXCHANGE ANNOUNCEMENT

 

JPMORGAN GLOBAL GROWTH & INCOME PLC

 

FINAL RESULTS FOR THE YEAR ENDED 30TH JUNE 2016

CHAIRMAN'S STATEMENT

During the financial year to 30th June 2016, world equity markets remained volatile as a result of a number of economic and political events culminating in the UK's decision on 23rd June 2016 to leave the European Union (EU). Over the year, the sterling return of the Company's benchmark, the MSCI All Countries World Index was 13.3% but in local currency terms the benchmark return was -3.2%. The major portion of the benchmark return therefore resulted from a sharp drop in sterling over the year, most of which occurred in the days after the Brexit vote.

The Investment Manager had a difficult year relative to the benchmark as valuations of certain stocks moved to extreme levels. This meant that the total return on the Company's net assets was lower than the benchmark, at 8.2%. However, this should be taken in the context of the strong performance of the Company since Jeroen Huysinga was appointed as manager in September 2008. Another headwind facing the Company was that equity investors abandoned both closed and open ended funds in the days after the Brexit vote, leading to a sharp widening of the discount at which the Company's shares trade relative to its net assets from 6.9% at the start of the year to 14.4%, notwithstanding an active policy of buying back shares. As a result the total return to shareholders for the year was -0.6%.

To a significant extent, 30th June 2016 represented a low point in the Company's fortunes. Since the end of the financial year, the manager has performed strongly as his investment approach has moved back into favour. Markets have also been strong and the discount has narrowed. At the time of writing (19th September 2016), the return to shareholders from the year end has been 16.1%.

Distribution and Dividends Policy

The Directors have conducted a detailed review of all aspects of the Company's strategy in conjunction with the Investment Manager and the Company's broker. The Directors have concluded that shareholders will be best served by a combination of the Investment Manager's existing investment process with an enhanced distribution policy. While there will inevitably be periods of under as well as over performance, the Directors are satisfied with long term performance since Jeroen Huysinga took over as manager and believe that a continuing implementation of his investment process will lead to further strong performance. At the same time, the Directors believe that the Company's distribution policy should be amended to increase the yield to shareholders and on 8th July 2016, the Board announced a proposed such change. The Board is aware that a number of investors are seeking investment opportunities that provide a reliable level of income alongside capital growth. In the current low interest rate environment and following the recent changes to the pension rules, the Board believes that investors will continue to be attracted to income generating investments. The Board is also mindful that, reflecting investors' ongoing desire for higher yielding investments, the global income sector of the investment trust universe typically trades at a more attractive rating than the global growth sector.

The Board is therefore proposing to amend the Company's distribution policy as follows:

•     The Company's intention is to pay dividends each financial year totalling at least 4.0% of the net asset value of the Company as at the end of the preceding financial year.

•     The intended dividends will be announced at the start of each financial year to provide clarity and predictability to shareholders about the income stream they can expect during the following 12 month period.

•     Dividends will be financed through a combination of available net income in each financial year and other reserves.

•     The intention is to pay dividends by way of four equal interim dividends in October, January, April and July each year.

•     In setting the annual dividends, the Company will aim to smooth any changes from previous years, again to provide clarity and predictability to shareholders.

The Board will propose a resolution at the Company's 2016 Annual General Meeting ('AGM') to amend the Company's articles of association to allow the Company to distribute capital as income to allow for the long-term implementation of the revised distribution policy.

The revised distribution policy will be effective for the year that commenced on 1st July 2016. However, in light of the fact that the Company intends to recommend a final dividend for the year ended 30th June 2016 under its existing distribution policy, which will be paid in November 2016, it is intended that the Company will only pay three quarterly dividends for the year ending 30th June 2017 each of 2.2p per share. The first dividend under the revised distribution policy of 2.2p per share will be paid in January 2017.

The Directors therefore intend to pay the following dividends:

•     a final dividend for the financial year to 30th June 2016 of 3.2p per share payable on 25th November 2016 to shareholders on the register at the close of business on 4th November 2016, subject to shareholders' approval at the forthcoming AGM in November 2016;

•     a first interim dividend of 2.2p per share for the financial year to 30th June 2017 payable in January 2017;

•     a second interim dividend of 2.2p per share for the financial year to 30th June 2017 payable in April 2017; and,

•     a third interim dividend of 2.2p per share for the financial year to 30th June 2017 payable in July 2017.

Hence the four dividends will amount to 9.8p in total, which represents a yield of 4.04% of the net asset value at the end of the financial year.

The Company has a dividend reinvestment programme which the Board hopes will prove useful to those investors who wish to reinvest their dividends as the Company moves to a quarterly dividend policy.

The Board believes the change to the Company's distribution policy will widen the appeal of the Company to investors as:

•     it will provide a yield that is expected to be at least in line with the global income sector while also seeking to provide a strong total return through a high conviction stock picking investment process;

•     it will continue to offer exposure to a global growth portfolio, which the Board believes will outperform over the longer term, while delivering a high and reliable income stream; and

•     it is expected to result in a narrowing of the discount to net asset value reflecting the appeal of higher income to investors.

It is important for investors to note that there is no proposed change in the Company's investment policy, nor to the Investment Manager's approach to investment nor to the current benchmark.

As a result of this revised distribution policy, the Company has been reclassified within the Global Equity Income sector by the Association of Investment Companies.

Change of Company Name

Reflecting the proposed change in distribution policy, the Company changed its name to JPMorgan Global Growth & Income plc on 8th July 2016. Following the change of name, the Company's ticker was changed to JPGI LN.

Sub-division of Company's Share Capital

On 8th January 2016, following shareholder approval at the last AGM on 5th November 2015, a sub-division of the Company's share capital took place on five for one basis which increased the number of ordinary shares in issue by a factor of five.

Share Issuance and Repurchases

During the year, the Company issued 3,885,042 Ordinary shares (before the sub-division of share capital) for a total consideration of £38,285,000 on the conversion of Subscription shares. Following the final exercise of subscription share rights on 30th October 2015, no subscription shares remain in issue and accordingly the listing of the subscription shares was cancelled on 30th November 2015.

Over the year, the share price to net asset value discount ranged between 4.6% and 14.4%. The Board continues to have a long term policy of managing the discount at which the share price trades relative to its net asset value with the objective of having the discount stand at around 5% or less. The changes to the distribution policy should be seen in the light of this policy. Should it become necessary to do so, the Board will approve the repurchase of the Company's shares in the market. To implement this policy last year, prior to the sub-division, 1,196,422 Ordinary shares were repurchased into Treasury for a total consideration of £12,339,000. After the sub-division of shares, a further 5,484,400 Ordinary shares were repurchased into Treasury for a total consideration of £11,066,000. At the year end, a total of 31,244,215 shares were held in Treasury.

A resolution to renew the authority to permit the Company to continue to repurchase shares will be proposed at the AGM in November 2016. Resolutions renewing the authorities to issue shares from Treasury and to issue new shares at a premium to net asset value, and to disapply pre-emption rights over such issues, will also be proposed at the AGM. Any shares held in Treasury will only be re-issued at a premium to net asset value.

Ongoing Charges

The Board continues to believe that the Company's ongoing charges (excluding performance fees) ratio of 0.64% for the year ended 30th June 2016 (2015: 0.64%) is competitive when compared to other trusts and savings products such as open ended funds actively investing in global equities. No performance fee is payable for the year ended 30th June 2016 (2015: 0.27% of net assets). The Board continues actively to monitor the Company's management fee arrangements to ensure they remain structured in the interests of shareholders.

Gearing

Gearing is regularly discussed between the Board and the Investment Manager. A borrowing facility of £25 million with National Australia Bank is in place until July 2018. This facility is flexible and can be used tactically as investment opportunities present themselves. The £25 million facility was fully drawn down at the year-end.

Currency Hedging

The Company continues its passive currency hedging strategy (implemented in late 2008) that aims to make stock selection the predominant driver of overall portfolio performance relative to the benchmark, the MSCI All Countries World Index (in sterling terms). This is a risk reduction measure, designed to eliminate most of the differences between the portfolio's currency exposure and that of the Company's benchmark. As a result the returns derived from, and the portfolio's exposure to currencies may differ materially from that of the Company's competitors in the AIC Global Growth sector, who generally do not undertake such a strategy.

The Board

As previously reported, Simon Davies retired from the Board at the conclusion of the last AGM on 5th November 2015 and I assumed the role of Chairman of the Board and of the Nomination Committee; Gay Collins became the Senior Independent Director.

Following the Board's annual evaluation by the Nomination Committee, it felt that, given the recent refreshment of the Board, its current composition and size is sufficient at the present time and no further changes are anticipated over the next 12 months.

The Board supports annual re-election for all Directors, as recommended by the UK Corporate Governance Code, and therefore all of the other Directors will stand for re-election at the forthcoming AGM.

Annual General Meeting

My fellow Directors and I invite you to attend the Company's Annual General Meeting which will be held at 60 Victoria Embankment, London EC4Y 0JP on Tuesday 1st November 2016 at 2.30 p.m. Given the change in respect of distribution policy the views of all shareholders are very welcome. An investment presentation will be made at the meeting by Jeroen Huysinga. If you have any detailed or technical questions, please submit these in advance of the meeting in writing, or via the Company's website, to the Company Secretary whose contact details are shown on page 73 of the 2016 Annual Report. Shareholders who are unable to attend the AGM in person are encouraged to use their proxy votes.

There will be an opportunity for shareholders to meet the Directors and the Investment Manager following the AGM. I hope to have the pleasure of meeting you then.

Outlook

As discussed earlier in my report, the performance of the Company in the last three months has been encouraging. There are sufficient uncertainties ahead including elections in the US, France and Germany, as well as the start of Brexit negotiations, to suggest that volatility will remain a feature of equity and currency markets, but the Board believes that the Investment Manager will continue to be able to identify high quality growth companies at attractive prices.

 

Nigel Wightman

Chairman

21st September 2016



 

INVESTMENT MANAGERS' REPORT

Market Environment

The MSCI All Countries World Index gained 13.3% in sterling terms over the 12 months to the end of June in what continued to be a volatile environment. Index returns were markedly stronger in sterling terms as the currency fell to its lowest level vs. the US dollar in over 30 years.

 

Equity markets fell sharply at the start of the financial year with the Volatility Index (VIX), or so-called 'fear index', hitting a five-year high. The initial catalyst was a surprise decision from the People's Bank of China to devalue the Chinese renminbi following disappointing manufacturing data which in turn raised concerns about the pace of global growth. Markets staged a recovery towards the end of 2015 as these fears gave way to signs that the global economic and corporate landscape was much more stable and resilient than feared. The US Federal Reserve (Fed) increased interest rates for the first time in almost a decade and the European Central Bank announced additional monetary easing to support the region's recovery. This recovery was, however, short-lived as 2016 saw the return of uncertainty surrounding global growth and fears over the effect of negative interest rate policy on banks' profitability and their willingness to lend into the real economy. While markets subsequently cheered a rebound in US retail sales, reassurance from the Chinese government over its reform plans and a recovery in commodity prices, arguably one of the most significant events of the period occurred right at the end. The UK electorate's decision to leave the European Union (EU) came as a shock to markets. In the immediate aftermath of the vote, global risk assets sold-off and sterling fell considerably while expectations that the US Fed would raise interest rates in June quickly evaporated.

 

Investors continued to seek shelter in 'safe-haven' assets such as consumer and healthcare giants; Unilever, SABMiller, Kellogg and Johnson & Johnson which outperformed companies more sensitive to global growth. The autos and banks sectors were the worst performers.

 

Portfolio Review

During the 12 months to June 2016 your Company underperformed the benchmark. The risk-off environment was challenging for the strategy which is pro-cyclically positioned with a bias towards higher beta (more volatile) stocks. This is a direct result of our bottom-up stock selection process which tells us that valuation spreads (the difference in valuation between cheaper and more expensive stocks) are well above average globally. Indeed, valuation spreads by beta are at extreme levels. Equally, defensive 'bond proxy' and lower volatility stocks are at exceptionally high valuations.

 

Our weakest areas of stock selection centred around banks, property, basic industries and healthcare. In banks our positions in Mitsubishi UFJ Financial Group and Intesa SanPaola were among the stocks to detract. We initiated a position in Intesa Sanpaolo, an Italian retail and commercial bank which is in a good position to grow organically within a troubled competitive landscape. Many Italian banks are having to deal with merger and acquisition, managerial changes and are hamstrung with weak balance sheets. This gives Intesa an excellent chance to grow volumes and increase market share particularly in loans, deposits and asset management. The company is one of the most profitable banks in Europe (making it relatively robust in the face of any credit cycle) and yet it trades at a material discount to its book value, due to concerns about the European economy and the bad debts in the Italian banking system. There are particular concerns around the possibility of Intesa having to act as a white knight by bailing out weaker players - Banca Monte di Paschi has been a case in point. Intesa remains unlikely to contribute but even if it does (despite vocal resistance from the CEO); we believe that this is more than reflected in the valuation already. This is a classic case of 'good house in a bad neighbourhood' - a theme which has represented a very accretive aspect of our stock selection process over the years.

 

In healthcare our holdings in biopharmaceutical companies with strong long-term earnings growth potential, including Vertex and Allergan, lagged more defensive names. Many of the companies that underperformed did so despite a distinct lack of company-specific news and no changes to their fundamental outlook. Shares in Vertex, the American healthcare company, lost around a quarter of their value, driven partly by a modest adjustment in expectations for one of the company's new drugs, but mostly by the severe correction in the biotech sector as a whole. We continue to believe the stock is undervalued as the market leader in the treatment of cystic fibrosis.

In basic industries our holding in First Quantum, the copper producer, saw its shares fall 84%. Originally, we had thought that there was a company-specific driver of value which could be unlocked by a strong management team. In reality, however, the commodity cycle has overwhelmed this thesis and the weakness of the balance sheet this has produced has also limited management options. We exited the position earlier this year.

 

Stock selection in media, retail and energy was positive for performance. This included a holding in Columbia Pipeline Group, the US pipeline operator, as TransCanada announced an all-cash acquisition of the company for USD 10.2 billion in a move that will create one of North America's largest regulated natural gas transmission businesses. The deal will give TransCanada access to miles of existing pipeline after its attempts to build new oil pipelines failed amid environmental concerns and a block from the US government. The acquisition is expected to be finalised in the second half of 2016, subject to regulatory approval.

 

Since the year-end, the portfolio has strongly outperformed the benchmark, with our positions in a number of more cyclical companies, which underperformed in previous months, driving this recovery.

 



 

Performance attribution

for the year ended 30th June 2016


%

%

Contributions to total returns



Benchmark return


13.3

  Asset allocation

-0.7


  Stock selection

-4.3


  Currency effect

-0.5


  Gearing/cash

-0.4


Investment Manager contribution


-5.9

Portfolio total return


7.4

  Management fee/other expenses

-0.6


  Performance fee

0.5


Net asset value total return - prior



  to structural effects


7.3

Structural effects



  Share buy-backs/issuance

0.8


  Effect of Subscription shares exercised



    in the financial year

0.1


Net asset value total return


8.2

Ordinary share price total return


-0.6

 

Source: Xamin/JPMAM and Morningstar.

All figures are on a total return basis.

Performance attribution analyses how the Company achieved its recorded performance relative to its benchmark index.

 

A glossary of terms and definitions is provided on page 70 of the 2016 Annual Report.

 

Portfolio positioning and outlook

Our focus remains on company-specific valuation signals derived from intensive company research and long term cash flow models. We have not made any significant changes to the overall shape of the portfolio which remains pro-cyclically positioned with a bias towards higher beta. Regionally our bottom-up process continues to result in large positions in Europe and the UK whereas North America is an area in which we are underweight. In the latter region excessive valuation still prevents us from investing in bond equivalents and many other mega caps. Quantitative easing and other manifestations of unconventional monetary policy have driven the relative valuation of bond equivalents to stratospheric levels. Our core belief is that low and negative interest rates are unlikely to be a permanent condition and our strategy continues to be positioned accordingly.

 

We remain vigilant in ensuring that our analyst estimates are as reflective as possible of the changing environment. We continue to look for opportunities to add to companies where our conviction in the long-term forecasts and fundamentals remain strong and yet shares have sold-off somewhat indiscriminately. Examples of companies we have added to this year include Shire Pharmaceuticals and Suzuki. Shire is a lead innovator of treatments for rare and highly specialised diseases. While investors were concerned around the company's pending acquisition of Baxalta, we believed that the deal presented significant potential for synergies. Following the deal completion in June and as the company raised 2016 guidance; shares recovered strongly. Suzuki has a 56% share in their Maruti Suzuki subsidiary, an automobile manufacturer in India. The subsidiary provides an unassailable 47% leading market share in India which has excellent long term growth potential. Combined with the company's low exposure to North America which appears to be approaching 'late cycle' and attractive valuation we added to our position.

 

Jeroen Huysinga

Investment Manager

 

21st September 2016



 

Principal Risks

 

With the assistance of the Manager, the Board has drawn up a risk matrix, which identifies the key risks to the Company. The Directors have carried out a robust assessment of the principal risks facing the Company.

 

These key risks fall broadly under the following categories:

•     Investment and Strategy: An inappropriate investment strategy, for example asset allocation or the level of gearing, may lead to under-performance 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 by the Manager. The Manager provides the Directors with timely and accurate management information, including performance data and attribution analyses, revenue estimates, liquidity reports and shareholder analyses. The Board monitors the implementation and results of the investment process with the Investment Manager, who attends all Board meetings, and reviews data which show statistical measures of the Company's risk profile. The Investment Manager employs the Company's gearing within a strategic range set by the Board. The Board may hold a separate meeting devoted to strategy each year.

•     Market: Market risk arises from uncertainty about the future prices of the Company's investments. It represents the potential loss that the Company might suffer through holding investments in the face of negative market movements. The Board considers asset allocation, stock selection and levels of gearing on a regular basis and has set investment restrictions and guidelines, which are monitored and reported on by the Manager. The Board monitors the implementation and results of the investment process with the Manager.

•     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 'Structure of the Company' within the Business Review section 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 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 Listing Rules and Disclosure, Guidance and Transparency Rules ('DTRs'). A breach of the Companies Act 2006 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 to ensure compliance with the Companies Acts and The UKLA Listing Rules and DTRs.

•     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 27 to 32 of the Company's 2016 Annual Report.

•     Operational: Loss of key staff by the Manager, such as the Investment Manager, 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. On 1st July 2014, the Company appointed BNY Mellon Trust & Depositary (UK) Limited to act as the depositary, responsible for overseeing the operations of the custodian, JPMorgan Chase Bank, N.A., and the Company's cash flows. 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 with the Risk Management and Internal Control section of the Corporate Governance report on pages 30 and 31 of the Company's 2016 Annual Report. The threat of cyber attack, in all its guises, is regarded as at least as important as more traditional physical threats to business continuity and security. The Company benefits directly or indirectly from all elements of JPMorgan's Cyber Security programme. The information technology controls around the physical security of JPMorgan's data centres, security of its networks and security of its trading applications are tested by Deloitte and reported every six months against the AAF Standard.

•     Going concern: Pursuant to the Sharman Report, Boards are now advised to consider going concern as a potential risk, whether or not there is an apparent issue arising in relation thereto. Going concern is considered rigorously on an ongoing basis and the Board's statement on going concern is detailed on page 30 of the Company's 2016 Annual Report.

•     Financial: The financial risks faced by the Company include market price risk, interest rate risk, liability risk and credit risk. Further details are disclosed in note 22 on pages 58 to 64 of the Company's 2016 Annual Report.

 

Related Parties Transactions

 

During the 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 year. 

Statement of Directors' Responsibilities

 

The Directors are responsible for preparing the annual report and the 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 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 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.

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.jpmglobalgrowthandincome.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 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 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 pages 23 and 24 of the Company's 2016 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 or loss 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 accounts taken as a whole are fair, balanced and understandable and provide the information necessary for shareholders to assess the Company's position and performance, business model and strategy.

 

For and on behalf of the Board
Nigel Wightman
Chairman

21st September 2016



 

STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30TH JUNE 2016


2016

2015



Revenue

Capital

Total

Revenue

Capital

Total

 



£'000

£'000

£'000

£'000

£'000

£'000

 

Gains on investments held at fair








  value through profit or loss


-

14,343

14,343

-

22,974

22,974

Net foreign currency gains


-

1,143

1,143

-

4,579

4,579

Income from investments


5,669

-

5,669

4,656

-

4,656

Interest receivable and similar income


89

-

89

48

-

48

Gross return


5,758

15,486

21,244

4,704

27,553

32,257

Management fee


(593)

(593)

(1,186)

(553)

(553)

(1,106)

Performance fee writeback/(charge)


-

1,672

1,672

-

(1,036)

(1,036)

Other administrative expenses


(572)

-

(572)

(584)

-

(584)

Net return on ordinary activities








  before finance costs and taxation


4,593

16,565

21,158

3,567

25,964

29,531

Finance costs


(184)

(184)

(368)

(149)

(149)

(298)

Net return on ordinary activities








  before taxation


4,409

16,381

20,790

3,418

25,815

29,233

Taxation


(407)

-

(407)

(380)

-

(380)

Net return on ordinary activities








  after taxation


4,002

16,381

20,383

3,038

25,815

28,853

Return per share - undiluted1


3.24p

13.27p

16.51p

2.64p

22.42p

25.06p

Return per share - diluted1, 2


3.24p

13.27p

16.51p

2.62p

22.23p

24.85p

 

1     Comparative figures for the year ended 30th June 2015 have been restated following the sub-division of each existing Ordinary share of 25p into five Ordinary shares of 5p each on 8th January 2016.

2     As at 30th June 2016 there was no dilution effect as the rights attached to the Subscription shares lapsed on 30th October 2015.

 

Details of the proposed dividend are given in note 2 below.

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 on ordinary activities after taxation represents the profit for the year and also Total Comprehensive Income.

 



 

STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30TH JUNE 2016


Called up


Capital




 


share

Share

redemption

Capital

Revenue


 


capital

premium

reserve

reserves

reserve1

Total

 


£'000

£'000

£'000

£'000

£'000

£'000

 

At 30th June 2014

6,660

3,213

27,401

190,534

17,827

245,635

Repurchase of shares into Treasury

-

-

-

(8,158)

-

(8,158)

Exercise of Subscription shares into







  Ordinary shares

(6)

6

-

-

-

-

Issue of Ordinary shares on exercise







  of Subscription shares

160

6,098

-

-

-

6,258

Net return on ordinary activities

-

-

-

25,815

3,038

28,853

Dividends paid in the year

-

-

-

-

(3,463)

(3,463)

At 30th June 2015

6,814

9,317

27,401

208,191

17,402

269,125

Repurchase of shares into Treasury

-

-

-

(23,405)

-

(23,405)

Exercise of Subscription shares into







  Ordinary shares

(39)

39

-

-

-

-

Issue of Ordinary shares on exercise







  of Subscription shares

971

37,314

-

-

-

38,285

Net return on ordinary activities

-

-

-

16,381

4,002

20,383

Dividends paid in the year

-

-

-

-

(4,234)

(4,234)

At 30th June 2016

7,746

46,670

27,401

201,167

17,170

300,154

 

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

 



 

STATEMENT OF FINANCIAL POSITION AT 30TH JUNE 2016



2016

2015

 



£'000

£'000

 

Fixed assets



Investments held at fair value through profit or loss

309,325

289,301

Current assets



Derivative financial assets

6,429

1,120

Debtors

5,855

1,256

Cash and cash equivalents1

11,411

7,961


23,695

10,337

Current liabilities



Creditors: amounts falling due within one year

(2,199)

(26,799)

Derivative financial liabilities

(5,467)

(1,842)

Net current assets/(liabilities)

16,029

(18,304)

Total assets less current liabilities

325,354

270,997

Creditors: amounts falling due after more than one year

(25,200)

(200)

Provision for liabilities and charges



Performance fee payable

-

(1,672)

Net assets

300,154

269,125

Capital and reserves



Called up share capital

7,746

6,814

Share premium

46,670

9,317

Capital redemption reserve

27,401

27,401

Capital reserves

201,167

208,191

Revenue reserve

17,170

17,402

Total equity shareholders' funds

300,154

269,125

Net asset value per share - undiluted2

242.7p

232.6p

Net asset value per share - diluted2,3

242.7p

227.5p

 

1     This line item combines the two lines of 'Investments in liquidity funds held at fair value through profit or loss' and 'Cash and short term deposits' in the financial statements for the year ended 30th June 2015 into one. Under FRS 102, liquidity funds are considered cash equivalents as they are held for cash management purposes.

 

2     Comparative figures for the year ended 30th June 2015 have been restated following the sub-division of each existing Ordinary share of 25p into five Ordinary shares of 5p each on 8th January 2016.

 

3     As at 30th June 2016 there was no dilution effect as the rights attached to the Subscription shares lapsed on 30th October 2015.

 

 

Company is registered in England and Wales number: 24299.



 

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30TH JUNE 2016

1.    Accounting policies

(a)  Basis of accounting

The financial statements are prepared in accordance with the Companies Act 2006, United Kingdom Generally Accepted Accounting Practice ('UK GAAP'), including FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and 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.

      All of the Company's operations are of a continuing nature.

The financial statements have been prepared on a going concern basis.  

2.   Dividends1

(a)  Dividends paid and proposed


2016

2015


£'000

£'000

Dividend paid



Unclaimed dividends refunded to the Company

(6)

(4)

2015 final dividend of 3.2p2 (2014: 3.0p2) per share

4,240

3,467

Total dividends paid in the year

4,234

3,463

Dividend proposed



2016 final dividend proposed of 3.2p (2015: 3.2p2) per share

3,957

3,702

The dividend proposed in respect of the year ended 30th June 2015 amounted to £3,702,000. However the amount paid amounted to £4,240,000 due to shares issued after the balance sheet date but prior to the share register record date.

The dividend proposed in respect of the year ended 30th June 2016 is subject to shareholder approval at the forthcoming Annual General Meeting. In accordance with the accounting policy of the Company, this dividend will be reflected in the financial statements for the year ending 30th June 2017.

(b) Dividend for the purposes of Section 1158 of the Corporation Tax Act 2010 ('Section 1158')

The requirements of Section 1158 are considered on the basis of the dividend proposed in respect of the financial year, shown below. The revenue available for distribution by way of dividend for the year is £4,002,000 (2015: £3,038,000).


2016

2015


£'000

£'000

Final dividend payable of 3.2p (2015: 3.2p2) per share

3,957

3,702

Total dividends for Section 1158 purposes

3,957

3,702

1     All dividends paid and proposed in the period have been funded from the Revenue Reserve.

2     The dividend rate has been restated following the sub-division of each existing ordinary share of 25p into 5p each on 8th January 2016.

 

3.   Return per share


2016

2015


£'000

£'000

Revenue return

4,002

3,038

Capital return

16,381

25,815

Total return

20,383

28,853

Weighted average number of Ordinary shares in issue during the period used



  for the purpose of the undiluted calculation

123,434,710

115,138,575

Weighted average number of Ordinary shares in issue during the period used



  for the purpose of the diluted calculation

123,434,710

116,113,190

Undiluted



Revenue return per share

3.24p

2.64p

Capital return per share

13.27p

22.42p

Total return per share

16.51p

25.06p

Diluted1



Revenue return per share

3.24p

2.62p

Capital return per share

13.27p

22.23p

Total return per share

16.51p

24.85p

1        As at 30th June 2016 there was no dilution effect as the rights attached to the Subscription shares lapsed on 30th October 2015.

Comparative figures for the year ended 30th June 2015 have been restated following the sub-division of each existing Ordinary share of 25p into five Ordinary shares of 5p each on 8th January 2016.

The diluted return per share represents the return on ordinary activities after taxation divided by the weighted average number of Ordinary shares in issue during the year as adjusted in accordance with IAS 33, as required by FRS 102.



 

4.   Net asset value per share

 


2016

2015

Undiluted



Net assets (£'000)

300,154

269,125

Number of Ordinary shares in issue

123,661,285

115,702,5852

Net asset value per share

242.7p

232.6p2

Diluted1



Net assets assuming exercise of Subscription shares (£'000)

300,154

307,431

Number of potential shares in issue

123,661,285

135,127,7952

Net asset value per share

242.7p

227.5p2

 

1     As at 30th June 2016 there was no dilution effect as the rights attached to the Subscription shares lapsed on 30th October 2015.

2     Comparative figures for the year ended 30th June 2015 have been restated following the sub-division of each existing ordinary share of 25p into five ordinary shares of 5p each on 8th January 2016.

5.   Status of announcement

 

     2015 Financial Information

      The figures and financial information for 2015 are extracted from the Annual Report and Accounts for the year ended 30th June 2015 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.

      2016 Financial Information

The figures and financial information for 2016 are extracted from the Annual Report and Accounts for the year ended 30th June 2016 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

 

21st September 2016

 

For further information:

 

Divya Amin,

JPMorgan Funds Limited

 

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.jpmglobalgrowthandincome.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
 
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