Source - RNS
RNS Number : 2382L
Jupiter Dividend & Growth Trust PLC
29 September 2016
 

Jupiter Dividend & Growth Trust PLC

 

Half-Yearly Financial Report for the six months to 30 June 2016 (unaudited)

 

Financial Highlights

 

Performance

 


As at

30.06.16

As at

31.12.15

% Change

Total assets less current liabilities (£'000)

50,884

53,957

-5.7

FTSE All-Share Index (Capital)

3,515.45

3,444.26

+2.1

FTSE All-Share Index (Total Return)

5,737.47

5,502.42

+4.3

 

Share Performance

 


As at

30.06.16

As at

31.12.15

% Change

Zero Dividend Preference shares




Mid-market price (pence)

115.75

114.75

+0.9

Net Asset Value (pence)

124.44

131.73

-5.5

Discount (%)

(7.0)

(12.9)






Ordinary Income shares




Mid-market price (pence)

3.00

3.63

-17.4

Net Asset Value (pence)

0.97

1.13

-14.2

Premium (%)

209.3

221.2






Common shares




Mid-market price (pence)

116.50

120.50

-3.3

Net Asset Value (pence)

127.32

134.45

-5.3

Discount (%)

(8.5)

(10.4)


 

Revenue Performance


Six months

Six months



to 30.06.16

to 30.06.15

% Change

Revenue after taxation due to Ordinary




Income shareholders (£'000)

698

784

-11.0

Return per Ordinary Income share (p)

0.76

0.85

-10.6

Return per Common share (p)




(shown within revenue finance costs)

2.12

2.46

-13.8

 

Chairman's Statement

 

Performance

The total assets less current liabilities of your Company fell by 5.7 per cent. to £50,884,000 during the six months to 30 June 2016. By comparison, the Company's benchmark index, the FTSE All-Share Index, rose by 2.1 per cent. (in capital terms) during the same period.

 

The period up to the end of June incorporated the unexpected outcome of the UK's referendum on EU membership and the concomitant sharp sell-off in equities. In particular, the shares of domestically-exposed companies such as housebuilders, retailers and banks fell sharply on fears of an immediate UK recession and a squeeze on profit margins with higher input costs from the sharp decline in the value of the pound.

 

Although longer-term uncertainty remained, the swift appointment of a new prime minister helped calm equity markets (which at the time of writing are now higher than before the vote). The shares of overseas earners who translate their overseas profits back into substantially higher sterling-denominated profits rallied most strongly; your Company has some exposure to healthcare, tobacco and oil companies - these have benefitted. The Company's domestically-exposed companies have partially (but not yet fully) recovered and we are awaiting greater clarity on how consumer and business behaviour will develop in the coming months and the extent to which the Bank of England and perhaps the Government will introduce stimulatory measures to shore up confidence with the aim of avoiding a "self-induced" recession.

 

Share Price Performance

The Net Asset Value of the Common shares decreased by 5.3 per cent. during the period under review from 134.45p to 127.32p (including income and expenses).

 

The Net Asset Value of the Zero Dividend Preference shares ('ZDPs') decreased by 5.5 per cent. during the period under review from 131.73p to 124.44p*, while the discount on the ZDPs moved from 12.9 per cent. to 7.0 per cent. over the period.

 

Due to the Company's geared capital structure, any fall in the Company's total assets is borne first by the Ordinary Income shares. The effect of gearing is that in rising markets the asset value of the Ordinary Income shares benefits from any outperformance of the Company's investment portfolio over and above the cost of the fixed entitlements of the Company's ZDPs and Common shares.

 

Conversely, when the Company's total assets fall, the Ordinary Income shares suffer to the extent of any shortfall between the return on the Company's investment portfolio and the cost of the fixed entitlements of the Company's ZDPs and Common shares. Furthermore, when the value of the assets falls severely, the fixed entitlements of the Company's ZDPs and Common shares may not be entirely covered.

 

The annual hurdle rate required to repay the ZDPs on 30 November 2017 was 12.3 per cent. as at 30 June 2016. The ZDPs were covered by a factor of 0.8.

 

As at 30 June 2016, there is currently a small capital value of 0.28p per share accrued to the Company's Ordinary Income shares, due to the revenue reserves attributable to the Company which are available for distribution as future dividends.

 

* The notional accrued entitlement of the ZDP shares at 30 June 2016 was 124.44p.

 

Revenue and Dividends

The Company's revenues after tax for the period amounted to £698,000. The revenue return per Ordinary Income share and Common share was 0.76p and 2.12p respectively.

 

During the period under review the following quarterly dividends were declared in respect of the year ending 31 December 2016:

 

1st interim dividend


Date


Record

Pay


declared

Rate

date

date

Shares

2016

(net)

2016

2016






Common shares

12 April

1.26p

22 April

20 May






Ordinary Income shares

12 April

0.45p

22 April

20 May

 

2nd interim dividend


Date


Record

Pay


declared

Rate

date

date

Shares

2016

(net)

2016

2016






Common shares

14 June

1.26p

22 July

19 August






Ordinary Income shares

14 June

0.45p

22 July

19 August

 

Dividends on the Ordinary Income and Common shares are paid in Sterling, quarterly in arrears. From time to time, subject to the requirements of the Corporation Tax Act 2010 the Directors may retain income in the revenue reserves of the Company with a view to producing a consistent level of dividend for Ordinary Income and Common shareholders in subsequent accounting periods.

 

Outlook

The UK stock market has mostly recovered from the shock of Britain's vote to leave the EU. The political vacuum that appeared immediately after the vote together with the temporary suspension of dealing by several large commercial property funds with its echoes of the 2008 financial crisis markedly increased nervousness and the yield on one two-year gilt issue briefly turned negative for the first time. However, the surprisingly quick formation of a new cabinet removed much uncertainty at the margin.

 

The weak performance of the pound since the referendum result reflects the prospects of an interest rate cut and increased probability of a recession, although UK Q2 GDP was stronger than expected. If the UK has had a minor heart attack then the sterling devaluation should provide a resuscitating shot of adrenaline. The weaker pound has boosted the overseas earnings of many blue chips; British exporters are now more competitive and UK assets should be more attractive to foreigners. For example, GlaxoSmithKline's dividend now looks more secure and the pharmaceutical giant is to invest in a major joint venture in bioelectronics at its R&D centre in Stevenage as well as investing £275m in three of its UK manufacturing sites.

 

In the immediate aftermath of the referendum, company trading and outlook statements have been scrutinised closely for signs of attrition but so far housebuilders have not reported cancellations nor has ITV reported any major cancellation of advertising budgets or any step change in spending patterns. Clearly, that could change and the balance of risks remain on the downside. Although we have seen some weakness in airline and travel companies this may be as much about terrorism fears as it is about Brexit, if not more.

 

The economy is likely to slow in the coming months, perhaps materially. However, your Company has been active to reflect the extraordinary change in the economic environment and our expectation is that there will be a range of policy initiatives to boost the economy, which may include interest rate reductions/monetary stimulus, housing market initiatives and infrastructure spending. Such initiatives would be particularly helpful for domestic companies, which are being priced for recession. Whilst this is a possibility, your Company does not regard the current environment as comparable to the 2008/9 global financial crisis when the banking system was bust, there was no availability of bank finance and business/consumer activity was in freefall.

 

The authorities are mindful of the need for prompt and supportive action. As a statement of intent we note that the chief economist of the Bank of England was quoted as saying "I would rather run the risk of taking a sledgehammer to crack a nut than taking a miniature rock hammer to tunnel my way out of prison."

 

Even so, an unpredictable time clearly lies ahead and your Company has responded by adjusting to a more defensive stance while backing companies which are well positioned for further growth and have the potential to deliver good returns and rising dividends.

 

 

Martin Boase

Chairman

29 September 2016

 

 

Investment Adviser's Review

 

Market Review

In the period under review, the FTSE All Share Index (in capital terms) and the FTSE 350 indices returned 2.1 per cent. and 7.5 per cent. respectively, while the total assets of your Company returned -5.7 per cent.

 

The year began with a plummet in the Chinese domestic equity market and global investors were quick to price in further scepticism about the country's credit bubble and its ability to restructure its economy from being investment led to consumption driven. In the US, markets grew perturbed by the prospect of the Federal Reserve ('Fed') continuing to raise rates into a weakening economy. However, in March a complete change of tone from the Fed together with a rise in the oil price was enough to make markets feel more relaxed (or at least less fearful) about the likelihood of a further renminbi devaluation and most of the relative gains in fixed interest were given back.

 

Although the UK labour market remained strong by historic standards there were clear signs in manufacturing and in construction that the domestic economy was slowing as investment, hiring and spending plans were increasingly put on hold ahead of the UK vote on continuing membership of the EU. Indeed, the latter half of June was particularly volatile for equities as investors responded to the fluctuating indications of opinion polls ahead of the EU referendum and then immediately afterwards to the unexpected result. Having rallied strongly in the days leading up to the vote when polls implied no change to the status quo, the pound fell to a 30 year low against the US dollar as global investors took fright. Although equity markets were quick to reprice global blue chip businesses upwards as dollar earnings were worth more in pounds, domestic stocks were marked down to reflect the greater likelihood of a recession. Prices of domestic cyclicals were much more volatile as market participants struggled to discount the likely hit to the economy even though it was, of course, far too soon to be able to tell.

 

Policy Review

The first quarter of 2016 was highly volatile as equity markets underwent a bout of rotation arising from China's attempt to reflate its economy. Although this was something we had been expecting, nevertheless it was a sizeable headwind. For example, your Company has long steered clear of mining stocks but these bounced strongly from distressed prices after a weaker dollar boosted commodity prices and led to a sector-wide bear squeeze, e.g. Glencore and Anglo American rallied 75 per cent. and 83 per cent. respectively in the quarter, while struggling supermarkets Tesco and Morrison surged 27 per cent. and 32 per cent. (before giving back their gains in the subsequent months). Your Company owns none of these, so performance relative to the benchmark suffered during the period. The rotation came at the expense of the more reliable areas of the market which your Company does hold such as BT and Ryanair. We remain distrustful of China's attempts to successfully reflate by using ever more debt.

 

Tougher trading conditions hurt retailer Next, while Barclay's surprise decision to half its dividend for the next two years also contributed negatively. That said, there were strong returns from Verizon, Imperial Brands, Royal Dutch Shell, Royal Mail and car insurer esure, where a turning of the motor insurance cycle should allow it to write more profitable business without diluting underwriting standards. We took some profits in the latter when the shares rose on a takeover rumour.

 

In early February we added to BP as we thought that pessimism around the low oil price was overdone, the yield was highly attractive and the dividend did not appear under immediate threat. We also built up a position in Centrica which we think can deliver solid dividend growth even if the oil price were to remain around $35 a barrel for the next three years. We added to Conviviality as its transformative takeover of Matthew Clark was delivering synergies faster than expected.

 

We bought CYBG (Clydesdale & Yorkshire Bank). The shares rose strongly following a decent set of maiden results. In our view the shares were cheap on 0.6x book value given that the bank is insulated against any past wrong doing via an agreement with its former Australian parent. We sold retirement home builder McCarthy & Stone following its initial public offering after the shares rallied some 40 per cent. to a level we consider fully valued.

 

Following signs that the domestic economy was slowing we began to reduce our exposure to banks such as Lloyds Banking Group and businesses susceptible to a slowdown in consumer discretionary spending such as N Brown and William Hill. We took some profits in Cineworld as the shares were fully valued. A fair portion of the portfolio was invested in domestic UK businesses which, albeit cyclical, looked set to continue to deliver reasonable growth, especially against a background of slower and more volatile global growth. Indeed the UK economy delivered steady growth in the second quarter of this year, growing 0.6 per cent. quarter on quarter. This part of your Company was positioned to benefit from a Remain vote which was our base expectation. Immediately following the Leave vote domestic cyclicals such as housebuilders Crest Nicholson and Galliford Try and ITV sold off sharply. This did not reflect weaker trading, it was simply fear: fear of a recession in the short term and fear of a weaker, slower-growing economy thereafter in a prolonged period of uncertainty amid fractious political negotiations. Following the quarter end, these stocks made significant recoveries as companies confirmed that their current trading appeared to be 'business as usual'.

 

Outlook

The unexpected result of the UK referendum on EU membership represents a profound change in the country's relations with its trading partners in Europe. A prolonged period of uncertainty seems assured, not just for the UK but also for Europe and the rest of the world.

 

Immediately following the result we acted swiftly to reduce some of our pure domestic exposure due to lower conviction about their immediate prospects. We cut positons such as Balfour Beatty (construction) and Next as consumer spending is likely to slow further, especially if sterling weakens further and businesses try to pass on higher import costs. We also reduced our bank holdings (Lloyds and Barclays). Not only are they likely to suffer from higher loan impairments but lower interest rates will also squeeze their margins and further defer the big expected step up in dividend payments.

 

However, with an eye on oversold valuations, we added to some of our higher conviction holdings (Crest Nicholson, Galliford Try) as well as to life insurance. Shares in the latter have been sold off as much as banks but we thought the yields are highly attractive (7-8 per cent.) and sustainable given that Solvency II requirements meant they have a strong capital positon and offered higher returns on equity than the banks. Thus, we added to Legal & General where a broadening of business opportunities in retirement and direct investment should underpin steady growth in an already attractive dividend. We think that housebuilders should benefit from likely monetary and fiscal measures. They already have attractive yields and should be able to continue their dividend payments because unlike 2007/08 most are not geared and can redirect cash from land purchases to dividends for a while. This was one area of the stock market that saw strong insider buying around the time of the Brexit vote.

 

Given the uncertainties that lie ahead and likely slowdown, we are seeking to make your Company more defensive. In the UK, we have made the portfolio more defensive and less reliant on discretionary spending. So far, we have added to Centrica, Royal Mail and taken a new position in BAE Systems.

 

We have also increased overseas exposure. We already have a number of big overseas earners in the portfolio (AbbVie, Verizon) but have added more (e.g. BAT) although we continue to shun the highly-valued staples such as Unilever, Diageo and Reckitt Benckiser. We opened new positons in Nokian Tyres and Novartis. The former has a strong balance sheet, a high dividend yield and is growing strongly in the US and western Europe. For consumers, tyres are replacement, safety related purchases and not greatly affected by economic conditions, but there is also a trend towards larger wheels which mean more profitable tyres for manufacturers. Novartis' shares were cheap in our view. After a period of weakness we think the pharmaceutical is likely to recover helped by rising sales of its new heart drug and a restructuring of its eye care division. Besides representing good investments in their own right, they can also help offset any further sterling depreciation which might occur.

 

All things being equal, heightened uncertainty means heightened volatility (temporary rallies, excesses of pessimism etc). We have therefore raised the cash position to around 6 per cent. with a view to taking advantage of the opportunities that we expect to emerge under such circumstances.

 

 

Alastair Gunn

Fund Manager

 

Jupiter Asset Management Limited

Investment Adviser

29 September 2016

 

 

 

 

 

Investment Portfolio as at 30 June 2016

 



Market value

Percentage

Company

Sector

£'000

of Portfolio

BP

Oil & Gas

3,066

6.2

Imperial Brands

Consumer Goods

2,533

5.2

Royal Dutch Shell 'B'

Oil & Gas

2,474

5.0

Vodafone Group

Telecommunications

1,934

3.9

GlaxoSmithKline

Health Care

1,764

3.6

British American Tobacco

Consumer Goods

1,695

3.5

AstraZeneca

Health Care

1,675

3.4

Playtech

Consumer Services

1,593

3.2

BT Group

Telecommunications

1,538

3.1

HSBC Holdings

Financials

1,399

2.9

AbbVie

Health Care

1,389

2.8

esure Group

Financials

1,359

2.8

WPP

Consumer Services

1,318

2.7

Aviva

Financials

1,300

2.6

CRH

Industrials

1,200

2.4

Mondi

Basic Materials

1,185

2.4

Micro Focus International

Technology

1,128

2.3

Royal Mail

Industrials

1,080

2.2

Centrica

Utilities

1,048

2.1

Crest Nicholson

Consumer Goods

1,032

2.1

Galliford Try

Consumer Goods

1,003

2.0

Legal & General Group

Financials

953

1.9

Conviviality

Consumer Services

905

1.8

Cineworld Group

Consumer Services

900

1.8

ITV

Consumer Services

899

1.8

Ryanair Holdings

Consumer Services

853

1.7

Babcock International Group

Industrials

768

1.6

Verizon Communications

Telecommunications

731

1.5

Prudential

Financials

722

1.5

Standard Chartered

Financials

705

1.4

Lloyds Banking Group

Financials

662

1.4

Direct Line Insurance Group

Financials

659

1.3

BAE Systems

Industrials

655

1.3

Keller Group

Industrials

610

1.2

International Consolidated Airlines Group

Consumer Services

592

1.2

Greencore Group

Consumer Goods

554

1.1

Nokian Renkaat

Consumer Goods

530

1.1

Sage Group

Technology

516

1.1

Next

Consumer Services

493

1.0

KCOM Group

Telecommunications

474

1.0

Novartis

Health Care

461

0.9

CYBG

Financials

452

0.9

Barclays

Financials

416

0.9

IMI

Industrials

411

0.8

Halfords Group

Consumer Services

321

0.7

Softcat

Technology

309

0.6

Midwich Group

Technology

303

0.6

N Brown Group

Consumer Services

290

0.6

Tullett Prebon

Financials

200

0.4

Thomas Cook Group

Consumer Services

188

0.4

Melrose Industries

Industrials

62

0.1

Total Investments


49,307

 100.0

 

 

Cross Holdings in other Investment Companies

 

It is the Company's stated policy that this exposure should not be permitted to exceed 15 per cent. of total assets. As at 30 June 2016, none of the Company's assets were invested in listed closed-ended investment funds.

 

 

Interim Management Report

 

Related Party 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 performance of the Company during the period.

 

Principal Risks and Uncertainties

The principal risks and uncertainties associated with the Company's business can be divided into the following areas:

 

·      investment policy and process

 

·      market movements

 

·      legal and regulatory compliance

 

·      gearing

 

·      operational, and

 

·      financial, such as market price risk, interest rate risk, liability risk and credit risk.

 

Information on these risks is set out in the 2015 Annual Report & Accounts.

 

In the view of the Board these principal risks and uncertainties are applicable to the remaining six months of the financial year as they were to the six months under review.

 

Going Concern

The Half-Yearly Financial Report has been prepared on a going concern basis. The Directors consider that this is the appropriate basis as they have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. In considering this, the Directors took into account the Company's investment objective, risk management policies and capital management policies, the diversified portfolio of readily realisable securities which can be used to meet short-term funding commitments and the ability of the Company to meet all of its liabilities and ongoing expenses. Thus the Directors continue to adopt the going concern basis of accounting in preparing the financial statements.

 

Directors' Responsibility Statement

The Board of Directors of Jupiter Dividend & Growth Trust PLC, confirms that, to the best of its knowledge:

 

(a)    The condensed set of financial statements have been prepared in accordance with the Financial Reporting Council's statement 'Interim Financial Reporting' and give a true and fair view of the assets, liabilities, financial position and profit of the Company for the period ended 30 June 2016;

 

(b)    The Chairman's Statement, the Investment Adviser's Review and the Interim Management Report include a fair review of the information required by Disclosure and Transparency Rule 4.2.7R; and  

 

(c)    The Interim Management Report includes a fair review of the information required by Disclosure and Transparency Rule 4.2.8R on related party transactions.

 

The Half-Yearly Financial Report has not been audited or reviewed by the Company's auditors.

 

For and on behalf of the Board

 

Martin Boase

Chairman

29 September 2016

 

 

Income Statement

 

For the six months to 30 June 2016 (unaudited)

 


Six months to 30.06.16

Six months to 30.06.15

Revenue

 Capital

Total

Revenue

Capital

Total


£'000

£'000

£'000

£'000

£'000

£'000

(Losses)/gains from investments






held at fair value through profit







or loss (Note 3)

-

(3,130)

(3,130)

-

1,964

1,964

Net foreign currency gains

-

2

2

-

4

4

Income

1,268

-

1,268

1,359

-

1,359

Gross return/(loss)

1,268

(3,128)

(1,860)

1,359

1,968

3,327

Investment management fee

(194)

-

(194)

(200)

-

(200)

Other expenses

(201)

(1)

(202)

(147)

-

(147)

Net return/(loss) on ordinary activities






before finance costs and taxation

873

(3,129)

(2,256)

1,012

1,968

2,980

Finance costs

(171)

2,927

2,756

(198)

(1,690)

(1,888)

Net return/(loss) on ordinary







activities before taxation

702

(202)

500

814

278

1,092

Tax on ordinary activities

(4)

-

(4)

(30)

-

(30)

Net return/(loss) on ordinary







activities after taxation

698

(202)

496

784

278

1,062

Net return/(loss) per Ordinary







Income share (Note 4)

     0.76p

(0.22)p

0.54p

0.85p

0.30p

1.15p

Net return/(loss) per Common share







(Note 4)

2.12p

(7.29)p

(5.17)p

2.46p

4.21p

6.67p

 

The total column of this statement is the profit and loss account of the Company prepared in accordance with UK Generally Accepted Accounting Practice ('UK GAAP').

 

All revenue and capital items in the above statement derive from continuing operations.

 

No operations were acquired or discontinued in the period.

 

The financial information does not constitute 'accounts' as defined in section 434 of the Companies Act 2006.

 

Statement of Financial Position

 

As at 30 June 2016


30.06.16

31.12.15


(unaudited)

(audited)


£'000

£'000

Fixed assets



Investments at fair value through profit or loss

49,307

53,170

Total Portfolio

49,307

53,170

Current assets



Debtors

542

149

Cash and cash equivalents

2,352

1,138


2,894

1,287

Creditors: amounts falling due within one year

(1,317)

(500)

Net current assets

1,577

787

Total assets less current liabilities

50,884

53,957

Creditors: amounts falling due after more than one year



Zero Dividend Preference shares and Common shares

(49,991)

(52,918)

Total net assets

893

1,039

Capital and reserves



Share capital

8,235

8,235

Share premium

21,864

21,864

Special reserve

62,062

62,062

Capital reserve*

(92,161)

(91,959)

Revenue reserve**

893

837

Total shareholders' funds

893

1,039

Net Asset Value per Ordinary Income share (Note 7)

0.97p

1.13p

 

* These reserves are subject to restrictions in terms of their distributability. Details of the restrictions are as follows: Distributions would only be made to holders of Common shares from the revenue reserve included in the capital reserve figure.

**These reserves form the distributable reserves of the Company and may be used to fund distribution of profits to investors via dividend payments.

 

Statement of Changes in Equity

 

For the six months to 30 June 2016 (unaudited)

 


Share

Share

Special

Capital

Revenue


For the six months

Capital

Premium

Reserve

Reserve

Reserve

Total

to 30 June 2016

£'000

£'000

£'000

£'000

£'000

£'000

Balance at 1 January 2016

8,235

21,864

62,062

(91,959)

837

1,039

Net return/(loss) for the period

-

-

-

(202)

698

496

Equity dividends paid and declared*

-

-

-

-

(642)

(642)

Balance at 30 June 2016

8,235

21,864

62,062

(92,161)

893

893








For the six months to 30 June 2015 (unaudited)

 

 

For the six months

Capital

Premium

Reserve

Reserve

Reserve

Total

to 30 June 2015

£'000

£'000

£'000

£'000

£'000

£'000

Balance at 1 January 2015

8,235

21,864

62,062

(91,572)

424

1,013

Net return for the period

-

-

-

278

784

1,062

Equity dividends paid and declared

-

-

-

-

(348)

(348)

Balance at 30 June 2015

8,235

21,864

62,062

(91,294)

860

1,727

 

* For the dividends paid and declared:

 

Fourth quarterly dividend of 0.25p (2015: 0.18p) has been paid out of revenue profits.

First quarterly dividend of 0.45p (2015: 0.20p) has been paid out of revenue profits.

 

Statement of Cash Flow

 

For the six months to 30 June 2016 (unaudited)

 


Six months to

Six months to


30.06.16

30.06.15


£'000

£'000

Net cash outflow from operating activities

(407)

(895)

Dividends received

1,153

1,756

Taxation

(4)

(30)

Cash flows from investing activities

742

831

Purchase of investments

(5,861)

(8,766)

Sale of investments

7,133

7,133

Other capital charges

(1)

-

Net cash inflow/(outflow) from investing activities

1,271

(1,633)

Cash flows from financing activities



Equity dividends paid

(642)

(348)

Finance costs (dividends) on Common shares

(157)

(85)

Net cash outflow from financial activities

(799)

(433)

Increase/(decrease) in cash

1,214

(1,235)

 

Cash and cash equivalents at the start of the period

1,138

1,757

Cash and cash equivalents at the end of the period

2,352

522


1,214

(1,235)

Cash and cash equivalents consist of:



Cash at bank and in hand

2,352

522


2,352

522

 

 

Notes to the Financial Statements

 

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 31 December 2015 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 includes the report of the auditors which was unqualified and did not contain a statement under either section 498(2) or 498(3) of the Companies Act 2006.

 

2.  Accounting Policies

The financial statements are prepared in accordance with the Companies Act 2006, United Kingdom Generally Accepted Accounting Practice ('UK GAAP'), including FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' (the 'SORP') issued by the Association of Investment Companies in November 2014.

 

FRS 104, 'Interim Financial Reporting', issued by the Financial Reporting Council ('FRC') in March 2015 has been applied in preparing this condensed set of financial statements for the six months ended 30 June 2016.

 

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

3.  (Losses)/gains on investments

 

Six months to

 30.06.16

Six months to

30.06.15


£'000

£'000

Net gains realised on sale of investments

40

1,902

Movement in investment holdings (losses)/gains

(3,170)

62

(Losses)/gains on investments

(3,130)

1,964

 

4.  Return per share

 

Return per Ordinary Income shares

 

Six months to

30.06.16

Six months to

30.06.15


£'000

£'000

Net revenue return applicable to Ordinary



Income shares

698

784

Net capital return applicable to Ordinary



Income shares

(202)

278

Net total return

496

1,062

Number of Ordinary Income shares in issue



during the period

91,675,333

91,675,333

Net revenue return per Ordinary Income share

0.76p

0.85p

Net capital loss per Ordinary Income share

(0.22)p

0.30p

Net return per Ordinary Income share

0.54p

1.15p

Revenue return per Common share



Number of Common shares in issue during the period

8,054,045

8,054,045

Net revenue return applicable to Common shares

2.12p

2.46p

Net capital return applicable to Common shares

(7.29)p

4.21p

Net return per Common share

(5.17)p

6.67p

Return per Zero Dividend Preference shares



Number of Zero Dividend Preference shares in issue during the period

32,119,031

32,119,031

Capital growth entitlement applicable to Zero Dividend Preference shares

(2,340)

1,262

Net return per Zero Dividend Preference shares

(7.29)p

3.93p

 

5.  Transaction Costs

During the period expenses were incurred in acquiring or disposing of investments classified as fair value.

 


Six months to 30.06.16

Six months to

30.06.15


£'000

£'000

Purchases

31

38

Sales

6

7

Total

37

45

 

6.  Comparative Information

The financial information contained in this interim report does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. The financial information for the six months to 30 June 2016 and 30 June 2015 has not been audited.

 

The information for the year ended 31 December 2015 has been extracted from the latest published audited financial statements. The audited financial statements for the year ended 31 December 2015 have been filed with the Registrar of Companies. The report of the auditors on those accounts contained no qualification or statement under section 498(2) or (3) of the Companies Act 2006.

 

7.  Net Asset Value per Ordinary Income share

The Net Asset Value per Ordinary Income share as at 30 June 2016, calculated in accordance with the Articles of Association, was as follows:

 



30.06.16


31.12.15


Net


Net



Asset Value


Asset Value



per share

Asset Value

per share

Asset Value


attributable

attributable

attributable

attributable


(p)

£'000

(p)

£'000

Ordinary Income shares

0.97

893

1.13

1,039

Common shares

127.32

10,254

134.45

10,828

Zero Dividend Preference shares

124.44

39,969

131.73

42,309

 

Net Asset Value per Ordinary Income shares on the balance sheet is based on net assets of £893,000 (31 December 2015: £1,039,000) and on 91,675,333 (31 December 2015: 91,675,333) Ordinary Income shares, being the number of Ordinary Income shares in issue at the end of the period.

 

8.  Fair valuation of investments

The fair value hierarchy analysis for investments held at fair value at the period end is as follows:

 





30.06.16


Level 1

Level 2

Level 3

Total


£'000

£'000

£'000

£'000

Quoted prices for identical instruments





in active markets

49,307

-

-

49,307

Total value of investments

49,307

-

-

49,307

 





31.12.15


Level 1

Level 2

Level 3

Total


£'000

£'000

£'000

£'000

Quoted prices for identical instruments





in active markets

53,170

-

-

53,170

Total value of investments

53,170

-

-

53,170

 

9.  Transactions with the Manager

Jupiter Unit Trust Managers Limited ('JUTM') is contracted to provide investment management services to the Company (subject to termination by not less than twelve months' notice by either party) for an annual fee of 0.75 per cent. of total assets less current liabilities payable quarterly in arrears.

 

The Management fee paid to JUTM for the period 1 January 2016 to 30 June 2016 was £194,000. Management fees of £96,000 were outstanding as at 30 June 2016 (30 June 2015: £100,000).

 

JUTM is also entitled to receive a performance fee of 15 per cent. of the amount by which audited total assets less current liabilities on the last day of each accounting period exceed the higher of (a) 110 per cent. of the total assets less current liabilities at the end of the immediately preceding accounting period and (b) the total assets less current liabilities at the end of the last accounting period for which a performance fee was paid ('the high water mark'). In the event of, inter alia, a reduction of capital or bonus issue the calculation of the performance fee shall be adjusted in such a manner as the Company's auditors shall determine is appropriate to take account of such events.

 

 

A copy of the Half-Yearly Financial Report has been submitted to the National Storage Mechanism and will shortly be available for inspection at www.morningstar.co.uk/uk/NSM

 

The Half-Yearly Financial Report will also shortly be available for download from the Company's website (www.jupiteram.com/JDT).

 

For further information, please contact:

 

Richard Pavry

Head of Investment Trusts

Jupiter Asset Management Limited, Company Secretary

[email protected]

020 3817 1496

 

29 September 2016

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
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