Interim Results

Jupiter European Opps. Trust PLC 07 February 2005 Jupiter European Opportunities Trust PLC Announcement of Unaudited Interim Results for the half year to 30th November 2004 CHAIRMAN'S STATEMENT -------------------- Your Company's net asset value per share rose by 10.0 per cent, from 109.25p to 120.14p during the six months under review. This result is marginally ahead of our benchmark, the FTSE World Europe ex-UK Index, which appreciated by 9.8 per cent. The return to shareholders is enhanced by the fact that the discount to net asset value contracted from 9.6 per cent to 5.9 per cent over the period. It will be noted that the list of the twenty largest investments shows little alteration since your Company's last year end. One of the holdings, Medion, fell sharply over the six month period. Your Manager, Alex Darwall, whom we welcomed on to the board at the last Annual General Meeting, comments specifically on the portfolio in his Manager's Report. Given our relatively concentrated list, where the top twenty investments account for over 90 per cent of the portfolio by value, the significant outperformance or underperformance of one holding will have a proportionate impact on the overall results. Nonetheless your Company's performance was ahead of the benchmark and remains one of the best in our sector since launch. The strength of the euro, particularly against the US dollar has caused the European Central Bank and other commentators to adjust downwards their estimate for European growth in the year ahead. Possibly because of this, European shares still appear reasonably valued. Indeed the combination of rising dividends and share buybacks provides a positive backdrop and, if oil prices continue to recede, we could see a worthwhile inflow of money into European equities in the months ahead. H M Priestley Chairman 7th February 2005 MANAGER'S REVIEW ---------------- Your Company performed in line with its Benchmark Index during the six month period under review. Your Company had borrowings of €14.7m throughout the period and this gearing added marginally to returns so that the Company's NAV increased very slightly more than the Index. The trading subsidiary JEOT Securities made a pre tax profit of £152,000. On the positive side, a number of long standing stocks in the portfolio delivered returns which were superior to the market. Against this, we had a number of disappointments, chiefly that of Medion, whose share price fell sharply following a profits warning, itself largely due to a sudden drop in consumer demand in Germany. A further negative factor was the portfolio's relatively high exposure to the dollar and relatively low commodity exposure. As a result, the portfolio was affected by the dollar's fall against the euro (down by 8.2% in the period under review) and failed to benefit fully from the strong performance of cyclical companies in the wake of rapid growth in China. The FTSE World Europe ex UK Index (+9.8%) has, again, outperformed the FT World Index (+4.2%). This continues the European pattern of the last three years; weaker economic growth than other regions of the world, but better equity markets than the world average. Clearly there is a paradox that domestic economic performance is a poor guide to equity market performance. Eurozone growth slowed through 2004; after 0.5% growth in 2003, the eurozone expectations are for 1.8% growth in 2004 and 1.5% in 2005. All these numbers are below the Organisation for Economic Co-operation and Development countries' forecasts. Yet some of Europe's cyclical companies have benefited from the strong Chinese demand. This exemplifies our belief that strict regional categorisations fail to recognise the increasingly international nature of many businesses. A number of crucial elements in the European business background changed in 2004. In Germany there were significant reforms of the welfare provisions. More significantly, a number of high profile labour agreements in the private sector are evidence of the changing political climate in Germany and recognition of the massive structural challenges that the Country faces. These problems confront all countries in Europe and are exacerbated by the European Union's admission of new members, whose lower taxes and labour costs are attracting companies to them. The effects of these developments were reflected in sector performance. The better performing sectors such as steel, metals, mining and chemicals benefited from the 'China effect'. Likewise, those sectors that performed badly, such as industrial products and consumer products, were indirectly hit by the strength of the Chinese economy as the cost of raw materials were driven up and European demand remained weak. It was no surprise given the sharp increase in the oil price that oil companies performed well. New cross-border mergers helped stocks in banking and financial services to perform relatively well. On the other hand, the pharmaceutical sector continued to under-perform as did the retail sector because of the malaise in European domestic economies notably in Germany, where consumer confidence remains low, and in France where the failure to reform retail laws continues to damage retailers. Furthermore, the growing presence of own label products has also had a negative impact on branded consumer goods. Turnover in the portfolio remained fairly low. Major purchases included Celesio, the German owner of wholesaling and retailing chains in the pharmaceutical sector. Other purchases included that of DIS, the premier German agency for temporary work in the 'white collar' sector, and BioMerieux, the French IVD company. Johnson Matthey a world leader in the field of catalysis, and RAC, a roadside service company, were purchased in the UK market. In Switzerland a new investment was made in Barry Callebaut, the world's leading chocolate company. The portfolio's position in Syngenta, one of the world's leading agrochemical companies, was increased, as was its holding in Dexia, the public sector lending bank based in France. The position in Autoliv was enlarged, as was the holding in Dassault Systemes. Major sales included those of ebookers and Ryanair, both motivated by concern about the strength of their business models. Repsol and Oriflame were sold following the announcement of disappointing profits. In the case of Zodiac and Clarins the positions were sold on valuation grounds and holdings in NovoNordisk and Intertek were slightly reduced for the same reasons. Investment outlook ------------------ For the market as a whole, the growth of the US and Chinese economies, and the level of the dollar are important short term factors. It is evident that technology is facilitating growth in emerging markets, notably China, and this is a tremendously positive factor for the foreseeable future. There are encouraging developments in Europe; in spite of the low rates of growth in many European countries, there are welcome signs that in Germany reforms are recognised as a necessity; the construction sector is recovering from its four year recession; and mergers and acquisitions activity is reviving. Your Company's objective continues to be the identification of companies whose success depends as far as possible on their own efforts. Such companies tend to perform well over a longer period of time, because they are less reliant on a particular set of economic circumstances and because the growth of globalisation is a positive development for 'better' companies. It is this perception that underpins our confidence for the future. Alex Darwall Manager Jupiter Asset Management Limited 7th February 2005 CONSOLIDATED STATEMENT OF TOTAL RETURN -------------------------------------- (Incorporating the Revenue Account) for the six months to 30th November 2004 (unaudited) 2004 2003 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Realised gains / (losses) on investments - 327 327 - (1,775) (1,775) Increase in unrealised appreciation of fixed - 9,336 9,336 - 15,328 15,328 asset investments _______ _______ _______ _______ _______ _______ Total capital gains on investments - 9,663 9,663 - 13,553 13,553 Foreign exchange (losses) / gains on loan - (429) (429) - 540 540 Other exchange gains/(losses) - 49 49 - (1) (1) Income 651 - 651 706 - 706 Gain on dealings by subsidiary 131 - 131 714 - 714 Foreign exchange gains by subsidiary 11 - 11 - - - Investment management fee (450) - (450) (359) - (359) Performance fee (383) - (383) - - - Other expenses (205) - (205) (236) - (236) _______ _______ _______ _______ _______ _______ Net return before finance costs and taxation (245) 9,283 9,038 825 14,092 14,917 Interest payable (171) - (171) (210) - (210) _______ _______ _______ _______ _______ _______ Return on ordinary activities before tax (416) 9,283 8,867 615 14,092 14,707 Tax on ordinary activities (8273) - (8273) (91) - (91) _______ _______ _______ _______ _______ _______ Return on ordinary activities after tax (489)8 9,283 8,79485 524 14,092 14,616 _______ _______ _______ _______ _______ _______ Transfer (from) / to reserves (489)98 9,283 8,79485 524 14,092 14,616 _______ _______ _______ _______ _______ _______ Return per Ordinary share (0.612)p 11.51p 10.8990p 0.65p 17.47p 18.12p The revenue column of this statement is the profit and loss account of the Group. All revenue and capital items in the above statement derive from continuing operations. The financial information does not constitute 'accounts' as defined in section 240 of the Companies Act 1985. CONSOLIDATED BALANCE SHEET -------------------------- as at 30th November 2004 30th November 31st May 2004 2004 (Unaudited) (Audited) £'000 £'000 Fixed assets Investments 106,373 93,335 _______ _______ Current assets Investments 412 1,070 Debtors 890 1,148 Cash at bank 341 2,821 _______ _______ 1,643 5,039 Creditors: amounts falling due within one year (887) (459) _______ _______ Net current assets 756 4,580 _______ ______ Total assets less current liabilities 107,129 97,915 Creditors: amounts falling due after more than one year (10,220) (9,791) _______ _______ Net Assets 96,909 88,124 _______ _______ Capital and reserves Called up share capital 807 807 Share premium 38,843 38,843 Special reserve 37,597 37,597 Redemption reserve 22 22 Capital reserve - realised (5,652) (6,028) Capital reserve - unrealised 25,198 16,291 Revenue reserve 94 592 _______ _______ Total equity shareholders' funds 96,909 88,124 _______ _______ Net asset value per Ordinary share 120.14p 109.25p CONSOLIDATED CASH FLOW STATEMENT --------------------------------- for the six months to 30th November 2004 (unaudited) 2004 2003 £'000 £'000 Operating activities Net cash inflow from operating activities 807 4,071 _______ _______ Servicing of finance Interest paid (162) (247) _______ _______ Net cash outflow from servicing of finance (162) (247) _______ _______ Taxation Net tax received / (paid) 118 (56) _______ _______ Capital expenditure and financial investment Purchase of fixed asset investments (22,146) (15,262) Sale of fixed asset investments 18,843 23,213 _______ _______ Net cash (outflow) / inflow from capital expenditure and financial investment (3,303) 7,951 _______ _______ Net cash (outflow) / inflow before financing (2,540) 11,719 _______ _______ Financing Long term loan repaid - (11,210) _______ _______ Net cash outflow from financing - (11,210) _______ _______ (Decrease) / increase in cash (2,540) 509 The interim report will be sent to all shareholders and copies may be obtained from the registered office of the Company at 1 Grosvenor Place, London, SW1X 7JJ. BY ORDER OF THE BOARD JUPITER ASSET MANAGEMENT LIMITED SECRETARIES This information is provided by RNS The company news service from the London Stock Exchange

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