Final Results for year ended 30 June 2019

RNS Number : 0120O

JPMorgan Global Growth & Income PLC

27 September 2019

 

LONDON STOCK EXCHANGE ANNOUNCEMENT

JPMORGAN GLOBAL GROWTH & INCOME PLC

ANNOUNCEMENT OF FINAL RESULTS FOR THE YEAR ENDED 30TH JUNE 2019

Legal Entity Identifier: 5493007C3I0O5PJKR078

Information disclosed in accordance with DTR 4.2.2

CHAIRMAN'S STATEMENT

Financial markets in the year to 30th June 2019 continued to be volatile, as a result of  concerns about the escalating trade war between the US and China and fears about the effects of this on global growth.

After recording falls in the first half of the financial year, the second half saw global markets recover strongly leading to positive performance for the full year. The Company's net asset value ('NAV') on a total return basis increased 8.7%, lagging the benchmark - the MSCI AC World Index expressed in sterling terms - which rose 9.7%. Meanwhile, the total return to shareholders was 8.8% during the period.

PERFORMANCE ATTRIBUTION

YEAR ENDED 30TH JUNE 2019

	%	%
Contributions to total returns
Benchmark return		9.7
Asset allocation	0.2
Stock selection	-1.6
Currency effect	0.2
Gearing/net cash	0.5
Investment Managers' contribution		-0.7
Portfolio total return		9.0
Management fee/other expenses	-0.6
Performance fee	0.3
Net asset value total return - prior
to structural effects		8.7
Structural effects Share buy-backs/issuance	-
Net asset value total return - Debt at par value		8.7
Impact of fair value valuation of debt	-0.3
Net asset value total return - Debt at fair value		8.4
Return to shareholders		8.8

Source: JPMAM and Morningstar.

All figures are on a total return basis.

This performance attribution analyses how the Company achieved its performance relative to its benchmark index. The Investment Managers' report provides a detailed commentary on these figures and discusses activity, performance and the market outlook.

Portfolio Management

As announced at the half year, Jeroen Huysinga has retired from JPMorgan after 22 years' service to pursue a graduate degree and then a career in the charities sector. Tim Woodhouse remains as one of the Company's portfolio managers and he has been joined by two other highly experienced members of the same Research Driven Process ('RDP') Portfolio Management team within JPMorgan, Rajesh (Raj) Tanna and Helge Skibeli. The investment approach (RDP) for the Company's portfolio management has remained unchanged. The Board has supervised the transition to the new portfolio management team and believes that the RDP investment approach will continue to deliver strong long term returns for the Company's shareholders through investing in liquid portfolio of stocks.

Distribution and Dividends Policy

The Company's revised dividend policy has now been in place for over three years. As a reminder the dividend policy aims to pay, in the absence of unforeseen circumstances, dividends totalling at least 4% of the NAV of the Company as at the end of the preceding financial year.

Where, in the view of the Board, the target dividend is likely to result in a dividend yield that is materially out of line with the wider market, the Board may choose to set the target dividend at a different level that is more in-line with the wider market and other global income trusts and funds.

The Board announced on 2nd July 2019 that, in relation to the year commencing 1st July 2019, the Company intends to pay dividends totalling 13.04p per share, which represented a yield of 4.00% of the unaudited NAV as at the 30th June 2019. It is expected that such dividends will be paid by way of four equal distributions, with the first distribution of 3.26p per share for the quarter to 30th September 2019 being paid on 4th October 2019 to shareholders on the register on 6th September 2019. The ex-dividend date is 5th September 2019.

The intended dividend for the year commencing 1st July 2019 represents an increase of 4.15% over the total dividends of 12.52p per share payable for the prior year.

Share Issuance and Repurchases

The Company has had a long standing policy of maintaining the discount at which our shares trade relative to NAV around or below 5%. Encouragingly, as has been the case for some time, the shares traded close to NAV during the year and indeed often traded at a premium. As a result the Company did not need to repurchase any shares and during periods when the shares traded at a premium, the Company was able to reissue 3,820,000 shares from Treasury for a total consideration of £14,788,000. Since the year-end, the Company has reissued a further 1,555,000 shares from Treasury for a total consideration of £5,251,000.At the year-end the share price premium to NAV stood at 0.3% and at the time of this report it stands at 3.3%.

A resolution to renew the authority to permit the Company to repurchase shares will be proposed at the Annual General Meeting ('AGM') in November 2019; resolutions renewing the authorities to issue shares from Treasury and to issue new shares, in both cases at a premium to NAV, and to disapply pre-emption rights over such issues, will also be proposed.

Ongoing Charges

The Board continues to believe that the Company's ongoing charges ratio (excluding performance fees) of 0.56% for the year ended 30th June 2019 (2018: 0.56%) is competitive when compared to other trusts and savings products such as open ended funds actively investing in global equities. No performance fee is actually payable for the year ended 30th June 2019 (2018: nil). Performance fees are calculated and payable over a four year period. There is a small accrual included in the financial statements in respect of performance fees that could become payable in future years. The Board continues actively to monitor the Company's management fee arrangements (including performance fees) to ensure they remain structured in the interests of shareholders.

Gearing

Gearing is regularly discussed between the Board and the Investment Manager. As announced on 9th January 2018, the Board issued £30 million fixed rate 30 year unsecured notes at an annual coupon of 2.93%. The notes are unsecured, which gives the Company increased flexibility to manage its borrowings in the future. The Investment Manager decreased gearing levels during the year from 4.9% at the start of the period to 3.8% at 30th June 2019. Since the year end, the Investment Manager has further reduced gearing to 0.1%.

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 World All Countries 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, who generally do not undertake such a strategy.

The Board

There have been no changes to the composition of the Board during the year.

As announced last year, as part of the Board's succession planning and in anticipation of the retirement of Jonathan Carey in 2020, the Board is currently considering recruitment of another non-executive Director for appointment after the conclusion of the forthcoming AGM on 12th November 2019. The Company has engaged Cornforth Consulting, a recruitment specialist for board level searches, as part of the recruitment process.

The Board supports the annual re-election for all Directors, as recommended by the UK Corporate Governance Code, and therefore all 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 AGM which will be held at 60 Victoria Embankment, London EC4Y 0JP on 12th November 2019 at 2.30 p.m. An investment presentation will be made at the meeting by the Investment Managers. 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 in the 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 Managers following the AGM. I hope to have the pleasure of meeting you then.

Outlook

The ongoing trade dispute between the US and China and attempts by the US Administration to influence Federal Reserve policy may unsettle markets in the coming months. The inversion of the US yield curve is also not a good sign. Closer to home, Brexit may lead to further volatility, particularly in the value of sterling. Despite these uncertainties and other risks, the Board is confident that the Investment team is well positioned to identify appropriate investment opportunities in this environment. The Investment Manager's investment process and the team's ability to enhance returns by seeking attractively priced stocks for the Company's portfolio, supported by the extensive worldwide research resources of JPMorgan, should help to deliver good long term returns for shareholders.

Nigel Wightman

Chairman                                                                                                                                     27th September 2019

INVESTMENT MANAGERS' REPORT

Volatility isn't going away

As we review the Company's financial year for the 12 months to June 2019, it is notable how much volatility we have come to live with. This volatility is found both in markets and in the geopolitical environment, and we enter the rest of 2019 with the prospect of exogenous factors significantly impacting companies around the world. From Brexit, where a Boris Johnson-led government is threatening the prospect of a hard Brexit, to the US-China trade war - we can't ignore that there is risk associated with the outcomes of these disputes. This unsettling backdrop for equities has of course led to volatility. The significant sell off between October and December 2018 went hand-in-hand with fears of an impending recession. As quickly as these fears manifested themselves, they were then gone. Markets hit new highs in 2019, with the MSCI ACWI index up 15.9% between 1st January and 30th June, although again, not without some bumps along the way. This volatility presented investors with some challenges over the past 12 months, including us as managers of your Company.

As we look forward, it is important to remember that markets are more volatile than the economy. The consumer remains in good shape and accounts for double the output of the industrial economy. Unemployment numbers remain low, wage growth is giving consumers more money in their pocket, and willingness to spend is stable. As managers of the Company, even when we see volatile markets, we need to remember that being invested long-term brings rich rewards. The Company invests in businesses that offer compelling returns over a number of years, and any volatility in the market should be embraced - it allows us to buy those companies at even more of a discount to their intrinsic value. We believe that this strategy will reap rewards in future years.

Portfolio Review and Spotlight on stocks

Stock picking in the first half of the financial year was the primary reason for the underperformance over the past 12 months. Asos, Pioneer Natural Resources, and Ryanair were the most significant detractors from performance.

British retailer Asos has faced a very challenging period, with weak results in December reflecting both stock-specific and industry-wide issues. The retail environment in the Christmas period was very difficult, and execution issues as Asos tried to roll out distribution centers in Europe and the US eroded margins. These continued execution issues led us to sell the stock.

Pioneer Natural Resources is a Permian basin oil company in the US, with some of the lowest cost acreage anywhere in the world. This premier geological positioning unfortunately hasn't translated into premier results. The company failed to meet expectations on both realizations and cost control, which culminated in the firing of the CEO. Recent meetings however have reassured us that the long-term thesis is intact, and that the positive changes the company has made will translate into meaningfully better results.

Ryanair has been facing a very difficult environment in the European air travel market, with excess capacity driving down prices. As with Pioneer, their ability to operate at a lower cost than their peers is a big economic advantage but pricing pressures led to a significant downgrade to earnings forecasts. As long-term investors, we continue to see the value in their business model, where air travel growth will create a favourable demand environment, allowing them to translate their cost position into strong profit growth.

Iberdrola, O'Reilly Automotive, and Microsoft were some of the strongest performers over the year. Iberdrola has delivered in exactly the way we had hoped, with their two most recent quarterly results demonstrating a better than expected performance, and an increase in future earnings guidance. The company remains well positioned to benefit from decarbonisation in Spain, a growth in offshore wind capacity, and sensible network investments.

O'Reilly is the leading company in a consolidating auto supply market in the US, offering great service to garages all over the country, and driving their market share up as a result. The tailwind from the growing number of ageing cars on the road gives them significant opportunities for growth in the coming years.

Microsoft has grown once more to be one of the largest companies in the world, but the scale of the opportunity ahead of them remains significant. Their Cloud business is growing revenue at over 40% per year and we believe that they can continue to grow at high rates. We believe that Office and Azure can also drive Microsoft for many years.

Our stock selection in Semiconductor & Hardware detracted from performance over the past 12 months. We continue to believe an underweight in Apple is justified given their slowing handset growth, and we believe that more attractive opportunities exist elsewhere, but that underweight hurt our performance. Conversely, our belief in the medium-term opportunities for both Infineon and Nvidia remains, but they were exposed to the slowdown in China, in both industrial and automotive sectors in the October-December quarter, leading to significant underperformance. We were disappointed with the price at which Infineon acquired a competitor - Cypress Semiconductor - and the stock reacted poorly to the deal. However, strategically we believe the deal has merit, and the poor share price performance has given us the opportunity to add to the stock at very attractive levels.

Over the course of the year, there were some small changes in geographical allocations. We increased our exposure to the US from 52% of the portfolio to 56.3%, taking us to an overweight position. France also increased, moving to our second-largest country exposure. The UK and Japan became smaller positions. These moves were driven not by any preference for one particular country, but by the opportunities we found in individual companies. For example in France we found new opportunities in Alstom, and also saw our position in Airbus grow larger as the stock outperformed. Our change in the UK was not driven by Brexit uncertainty, as we already had little exposure to domestic UK names, but by our more negative view on stocks like Asos and Vodafone.

Outlook and Portfolio Positioning

Having increased gearing at the start of the year given our belief that earnings growth would be resilient, we have recently reduced it to reflect increased risks and markets at all-time highs. The volatility in December last year afforded us some opportunities, and we believe that it is prudent to now bring exposure back down again having taken advantage of those opportunities. It is important to note however that gearing remains a positive feature of the Company, and we are actively watching for the opportunity to take it higher once more.

China-US relations is a topic that one could spend hours on, only to find that one tweet changes the situation entirely. At this stage we think it is clear that there is no easy deal to be had. With further tariffs put in place as of 1st September, the market fears things will get worse. We should remember though, that neither side wishes to harm their economy, and that fact should prevent the disagreement from turning into something much worse.

We are seeing data from the industrial companies we research that is less than encouraging, unsurprisingly given the trade tension, but at the same time the consumer remains strong. We have enough precedent to know the consumer doesn't necessarily have to weaken, but the answer to that will determine when we have the next recession. We are watching carefully unemployment and job openings data for signs of weakness.

One important difference between what we thought back in December, and what we think today, is the mindset of central banks. We have just seen the first cut from the US Federal Reserve. Another is expected this month. Policymakers have emphasized they are 'data-dependent'. This loosening of monetary policy is one important tool that could extend the cycle further, and central banks' willingness to use it is an important indicator for markets.

When we bring these dynamics together, there is no clear picture. In this environment it is more important than ever to focus on where we can best add value - the insights we generate on individual stocks through our bottom-up research. By ensuring we understand where the great businesses are, when we do experience pullbacks in markets, we can buy those businesses at attractive valuations. Recent examples of this include industrial companies where the market is already discounting a recession, and financial services companies that really differentiate themselves from their peers. We have increased our weights in both these sectors in recent months.

We believe our distinctive investment strategy is a compelling one. Investing in equities means living through some volatility, but we are confident that our expertise, combined with our global best ideas 'go anywhere' portfolio and JPMorgan's award-winning and experienced global research team, can deliver significant long-term total returns for investors.

One important aspect to close on is the continuity after the retirement of one of your investment managers, Jeroen Huysinga. The current team is vastly experienced, and utilizes the same strong research team that this Company has used for many years. There have been some changes in holdings as a result of this transition, but our strong investment process remains the same. We look forward to continuing our successful partnership with the Board, and with you as shareholders.

Helge Skibeli

Rajesh Tanna

Tim Woodhouse

Investment Managers                                                                                                                      27th September 2019

PRINCIPAL RISKS

The Directors confirm that they have carried out a robust assessment of the principal risks facing the Company, including those that would threaten its business model, future performance, solvency or liquidity.

With the assistance of the Manager, the Board has drawn up a risk matrix, which identifies the key risks to the Company. In assessing the risks and how they can be mitigated, the Board has given particular attention to those risks that might threaten the viability of 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 29 to 32 of the 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 the Bank of New York Mellon (International) 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 31 and 32 of the 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 independent auditors 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 33 of the 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 23 on pages 64 to 69 of the Annual Report.

TRANSACTIONS WITH THE MANAGER AND RELATED PARTIES

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

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The Directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law, the Directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under Company law the Directors must not approve the financial statements unless they are satisfied that, taken as a whole, the annual report and financial statements are fair, balanced and understandable, provide the information necessary for shareholders to assess the Company's performance, business model and strategy and that they give a true and fair view of the state of affairs of the Company and of the total return or loss of the Company for that period. In order to provide these confirmations, and in preparing these financial statements, the Directors are required to:

•        select suitable accounting policies and then apply them consistently;

•        make judgements and estimates that are reasonable and prudent;

•        state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

•        prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

and the Directors confirm that they have done so.

The Directors are responsible for keeping proper accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The financial statements are published on the www.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 financial statements since they were initially presented on the website. The financial statements are prepared in accordance with UK legislation, which may differ from legislation in other jurisdictions.

Under applicable law and regulations the Directors are also responsible for preparing a Directors' Report, Strategic Report and Directors' Remuneration Report that comply with that law and those regulations.

Each of the Directors, whose names and functions are listed on page 26 of the Annual Report confirm that, to the best of their knowledge:

•        the financial statements, which have been prepared in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), give a true and fair view of the assets, liabilities, financial position and return 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 financial statements taken as a whole is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company's position and performance, business model and strategy.

For and on behalf of the Board

Nigel Wightman

Chairman

27th September 2019

STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 30TH JUNE 2019

	2019			2018
	Revenue	Capital	Total	Revenue	Capital	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Gains on investments held at fair
value through profit or loss	-	26,453	26,453	-	27,402	27,402
Net foreign currency gains/(losses)	-	2,404	2,404	-	(1,948)	(1,948)
Income from investments	8,989	-	8,989	7,483	-	7,483
Interest receivable and similar income	109	-	109	115	-	115
Gross return	9,098	28,857	37,955	7,598	25,454	33,052
Management fee	(863)	(863)	(1,726)	(832)	(832)	(1,664)
Performance fee writeback	-	1,040	1,040	-	1,101	1,101
Other administrative expenses	(572)	-	(572)	(533)	(18)	(551)
Net return before finance costs and taxation	7,663	29,034	36,697	6,233	25,705	31,938
Finance costs	(448)	(448)	(896)	(292)	(292)	(584)
Net return before taxation	7,215	28,586	35,801	5,941	25,413	31,354
Taxation	(863)	-	(863)	(599)	-	(599)
Net return after taxation	6,352	28,586	34,938	5,342	25,413	30,755
Return per share	4.87p	21.91p	26.78p	4.24p	20.16p	24.40p

STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 30TH JUNE 2019

	Called up		Capital
	share	Share	redemption	Capital	Revenue
	capital	premium	reserve	Reserves1	reserve1	Total
	£'000	£'000	£'000	£'000	£'000	£'000
At 30th June 2017	7,746	46,670	27,401	282,972	12,395	377,184
Issue of shares from Treasury	-	7,306	-	9,699	-	17,005
Net return	-	-	-	25,413	5,342	30,755
Dividends paid in the year (note 3)	-	-	-	-	(14,154)	(14,154)
At 30th June 2018	7,746	53,976	27,401	318,084	3,583	410,790
Issue of shares from Treasury	-	4,980	-	6,938	-	11,918
Net return	-	-	-	28,586	6,352	34,938
Dividends paid in the year (note 3)	-	-	-	(6,194)	(9,935)	(16,129)
At 30th June 2019	7,746	58,956	27,401	347,414	-	441,517

¹ These reserves form the distributable reserves of the Company and may be used to fund distributions to investors via dividend payments.

STATEMENT OF FINANCIAL POSITION

AT 30TH JUNE 2019

	2019	2018
	£'000	£'000
Fixed assets
Investments held at fair value through profit or loss	458,287	431,001
Current assets
Derivative financial assets	1,770	4,156
Debtors	1,062	1,352
Cash and cash equivalents	12,499	8,008
	15,331	13,516
Current liabilities
Creditors: amounts falling due within one year	(571)	(832)
Derivative financial liabilities	(1,298)	(1,629)
Net current assets	13,462	11,055
Total assets less current liabilities	471,749	442,056
Creditors: amounts falling due after more than one year	(30,026)	(30,020)
Provision for liabilities and charges
Performance fee payable	(206)	(1,246)
Net assets	441,517	410,790
Capital and reserves
Called up share capital	7,746	7,746
Share premium	58,956	53,976
Capital redemption reserve	27,401	27,401
Capital reserves	347,414	318,084
Revenue reserve	-	3,583
Total shareholders' funds	441,517	410,790
Net asset value per share	332.4p	318.4p

STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 30TH JUNE 2019

	2019	2018
	£'000	£'000
Net cash outflow from operations before dividends and interest	(2,202)	(2,227)
Dividends received	7,954	6,916
Interest received	61	83
Overseas tax recovered	244	30
Interest paid	(892)	(233)
Net cash inflow from operating activities	5,165	4,569
Purchases of investments	(473,732)	(301,877)
Sales of investments	472,974	298,918
Settlement of forward currency contracts	4,393	(7,403)
Net cash inflow/(outflow) from investing activities	3,635	(10,362)
Dividends paid	(16,129)	(14,154)
Issue of shares from Treasury	11,819	17,005
Issue of loan notes (net of costs)	-	29,820
Repayment of bank loans	-	(25,000)
Net cash (outflow)/inflow from financing activities	(4,310)	7,671
Increase in cash and cash equivalents	4,490	1,878
Cash and cash equivalents at start of year	8,008	6,131
Exchange movements	1	(1)
Cash and cash equivalents at end of year	12,499	8,008
Increase in cash and cash equivalents	4,490	1,878
Cash and cash equivalents consist of:
Cash and short term deposits	518	764
Cash held in JPMorgan Sterling Liquidity Fund	11,981	7,244
Total	12,499	8,008

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30TH JUNE 2019

1.       Accounting policies

          Basis of accounting

The financial statements are prepared under the historical cost convention, modified to include fixed asset investments at fair value, and in accordance with the Companies Act 2006, United Kingdom Generally Accepted Accounting Practice ('UK GAAP'), including FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and with the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' (the 'SORP') issued by the Association of Investment Companies in November 2014 and updated in February 2018.

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

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

The policies applied in these financial statements are consistent with those applied in the preceding year.

2.       Return per share

	2019	2018
	£'000	£'000
Revenue return	6,352	5,342
Capital return	28,586	25,413
Total return	34,938	30,755
Weighted average number of shares in issue	130,500,107	126,044,353
Revenue return per share	4.87p	4.24p
Capital return per share	21.91p	20.16p
Total return per share	26.78p	24.40p

3.       Dividends

(a)     Dividends paid and declared

	2019	2018
	£'000	£'000
Dividends paid
Unclaimed dividends refunded to the Company	(12)	(21)
2018 fourth interim dividend of 3.04p (2017 final: 2.20p)	3,922	2,721
2019 first interim dividend of 3.13p (2018: 3.04p)	4,038	3,765
2019 second interim dividend of 3.13p (2018: 3.04p)	4,081	3,798
2019 third interim dividend of 3.13p (2018: 3.04p)	4,100	3,891
Total dividends paid in the year	16,129	14,154
Dividend declared
2019 fourth interim dividend of 3.13p (2018: 3.04p)	4,157	3,922

The fourth interim dividend of 3.13p has been declared and was paid on 5th July 2019 for the financial year ended 30th June 2019. In accordance with the accounting policy of the Company, this dividend will be reflected in the financial statements for the year ending 30th June 2020.

(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 dividends declared in respect of the financial year, shown below. The revenue available for distribution by way of dividend for the year is £6,352,000 (2018: £5,342,000). The revenue reserve after payment of the second interim dividend (2018: fourth interim) amounts to £nil (2018: £nil) and the remaining amount has been drawn from the capital reserve.

	2019	2018
	£'000	£'000
2019 first interim dividend of 3.13p (2018: 3.04p)	4,038	3,765
2019 second interim dividend of 3.13p (2018: 3.04p)	4,081	3,798
2019 third interim dividend of 3.13p (2018: 3.04p)	4,100	3,891
2019 fourth interim dividend of 3.13p (2018: 3.04p)	4,157	3,922
	16,376	15,376

The dividend proposed at the year end will be funded from the capital reserves.

4.       Net asset value per share

	2019	2018
Net assets (£'000)	441,517	410,790
Number of ordinary shares in issue	132,821,285	129,001,285
Net asset value per share	332.4p	318.4p

5. Status of announcement

     2018 Financial Information

     The figures and financial information for 2018 are extracted from the Annual Report and Financial Statements for the year ended 30th June 2018 and do not constitute the statutory accounts for that year.  The Annual Report and Financial Statements has been delivered to the Registrar of Companies and included the Report of the Independent Auditors which was unqualified and did not contain a statement under either section 498(2) or section 498(3) of the Companies Act 2006.

     2019 Financial Information

The figures and financial information for 2019 are extracted from the Annual Report and Financial Statements for the year ended 30th June 2019 and do not constitute the statutory accounts for that year.  The Annual Report and Financial Statements 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 Financial Statements 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

27th September 2019

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

 

END

 

 

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