Final Results

RNS Number : 2977A

JPMorgan Overseas IT PLC

25 September 2015

 

LONDON STOCK EXCHANGE ANNOUNCEMENT

JPMORGAN OVERSEAS INVESTMENT TRUST PLC

FINAL RESULTS FOR THE YEAR ENDED
30TH JUNE 2015

The Directors of JPMorgan Overseas Investment Trust plc announce the Company's results for the year ended 30th June 2015.

Chairman's Statement

During the year ended 30th June 2015, global equity market conditions continued to improve steadily as the major economies around the world showed signs of ongoing recovery. It is pleasing to report that the Company recorded another positive year with a total undiluted return on net assets of +11.8%, ahead of the total return of +9.5% of the benchmark, the MSCI All Country World Index (in sterling terms). The total return to shareholders was +10.3% over the reporting period. The positive return for the year continues the longer term trend of adding value for shareholders since the appointment of Jeroen Huysinga as the manager in September 2008.

The Investment Manager's Report provides a detailed commentary on the Company's investment strategy and performance.

Dividends

The Directors are proposing, subject to shareholders' approval at the Annual General Meeting ('AGM'), to pay a final dividend of 16.0 pence per share (2014: 15.0 pence) on 11th December 2015 to shareholders on the register at the close of business on 13th November 2015. The increase in the dividend reflects the underlying growth in dividends from the portfolio we hold. While the Company's principal aim is to maximise capital growth, the Board does appreciate that many shareholders like to receive a dividend rather than have to sell shares to obtain income.

Share Issuance and Repurchases

Over the year, the share price to net asset value discount ranged between 2.9% and 7.7%. The Board will continue to manage the discount at which the share price trades relative to its net asset value at around 5% and should it become necessary, repurchase the Company's shares in the market to achieve this. The Company repurchased 782,738 Ordinary shares into Treasury for a total consideration of £8,158,000. At the year end, a total of 3,955,541 shares were held in Treasury.

During the year, 638,653 Ordinary shares were issued upon exercise of Subscription shares. At the year end there were 3,885,042 Subscription shares in issue. Details of the final opportunity to exercise the Subscription shares at 986 pence by 30th October 2015 have been sent to shareholders and are also given on page 71 of the Company's 2015 Annual Report.

A resolution to renew the authority to permit the Company to continue to repurchase shares will be submitted to the AGM. 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 submitted for approval 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 2015 (2014: 0.63%) represents good value when compared to other trusts and savings products such as open ended funds actively investing in global equities. An additional 0.27% was paid in performance fees for the year ended 30th June 2015 (2014: 0.22%) as a result of strong performance of the manager. The Board continues to actively 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. Gearing contributed +0.6% to performance during the year under review.

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 in the AIC Global Growth sector, who generally do not undertake such a strategy.

Proposed sub-division of Company's Share Capital

The Board is proposing to implement a sub-division of the Company's share capital. The Company's share price was 1,050.0 pence per share at the year end and a stock split would assist with the practicalities of investors choosing to invest through platforms, regular savings schemes or by way of dividend reinvestment as they would be left with a smaller potential cash balance following any investment. This may increase the attractiveness of the Company's shares to potential investors and may also increase the liquidity in the market for the Company's shares. In the six years to 30th June 2015, the Company's share price has increased from 515.50 pence per share to 1,050.0 pence per share. Therefore the Directors believe it is appropriate to recommend a five for one share split, which will increase the number of Ordinary shares in issue by a factor of five. Shareholders should note that the proposed sub‑division of the Company's share capital will not affect the overall value of their holdings in the Company because although the share price will effectively be divided by five, they will have five times the number of shares previously held.

Based on the price per share at the year end, 30th June 2015 of 1,050.0 pence per share, and following a sub-division, each ordinary shareholder would receive five new shares for every one ordinary share previously held and the five new shares would trade at 210.0 pence per share. This information is provided for illustrative purpose only. The market price of the shares both before and after the completion of the proposed sub-division, will vary depending on market conditions at the relevant time. The proposed sub-division of the Company's share capital is subject to shareholder approval at the Annual General Meeting.

The Board

As previously reported, I plan to retire from the Board immediately after the forthcoming AGM. Accordingly, I will not stand for re-election at that meeting. Nigel Wightman will succeed me as Chairman of the Board and also as Chairman of the Nomination Committee. I am confident that Nigel will serve the Company and its shareholders very well. Gay Collins will assume the role of Senior Independent Director from Nigel.

As part of the Board's succession planning, the Nominations Committee carried out a recruitment process which led to the appointment of Tristan Hillgarth as a non‑executive director immediately after the Annual General Meeting last November. Tristan has over 30 years of experience in the asset management industry having been a director of Jupiter Asset Management for eight years and before that he was at Invesco where he held several senior positions over 14 years including CEO of Invesco's UK and European business. Shareholders will be asked to elect him at the forthcoming AGM. The Board will revert to being comprised of four Directors after the AGM, however, a regular review of its size and composition will be undertaken by the Nomination Committee.

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

It has been a great pleasure and a privilege to have been a Director of the Company since 1999 and Chairman since 2010. I would like to thank my Board colleagues for all their help and support over these years. Good investment performance is the vital ingredient to ensure the success of the Company and I am delighted that Jeroen Huysinga has proved to be such an able stock picker. I should like to thank all shareholders for supporting the Board over the period during which I have been involved and I would also like to thank J.P. Morgan for the effective management and administration of the Trust over the time I have been involved. The Board's top priority continues to be to deliver the best possible returns for shareholders and I wish my colleagues every success in the future.

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 Thursday, 5th November 2015 at 2.30 p.m. 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 77 of the Company's 2015 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

Since the year end the prospect of US interest rates moving upwards in the near term, uncertainties about Greece and issues surrounding China's economy have caused significant volatility in equity markets. However, despite these and other risks, the Board is confident that the Investment Manager and his team are well positioned to identify appropriate investment opportunities in this environment and that the Company's portfolio is well placed to deliver good performance over the longer term.

Simon Davies

Chairman

25th September 2015

Investment Manager's Report

Global equity markets continued to rise during the 12 months to the end of June 2015 with the MSCI All Countries World up 9.5% in sterling terms. Since we assumed responsibility for JPMorgan Overseas in October 2008, global equity markets have increased by 96%; an annualised return of around 10%. Both during the 12 months to June 2015 and since inception in 2008 our strategy has performed better than our benchmark with returns of 11% and 12.8% (annualised) respectively.

Last year saw significant dispersion between regions, sectors and currencies. Performance between sectors was very marked last year with investors showing a strong preference for the fastest-growing companies. Healthcare, and interest and social media companies (within the Information Technology sector) are leading this particular phase of growth investing, within Healthcare up 28% over the period and Facebook's market cap surpassing that of Walmart, not a bad achievement given that Walmart has a workforce more than 200 times larger than that of Facebook. Particularly in the US, the market has been increasingly anticipating higher interest rates; the likely beneficiaries of this trend in banks and insurance performed well, while the so-called 'bond proxies' (utilities, REITs and the like) have performed poorly and surrendered much of their relative outperformance versus the rest of the market. With global growth sluggish, and in particular the Chinese economy still disappointing, the commodity super cycle has continued to unwind, leaving many energy, basic materials and capital goods stocks struggling with falling profits.

The positive relative performance of JPMorgan Overseas was driven by investments across a wide range of sectors and regions including US healthcare, global banks and European industrials.

In healthcare, our exposure to Health Maintenance Organisations (HMOs) such as Humana and UnitedHealth Group in the US has been very positive. With strong enrolment growth in government programmes (Obamacare), vast cash flow generation, and clear evidence of consolidation through acquisitions, we continue to have high conviction in both of these stocks. Elsewhere in the sector we have benefited from investments in Boston Scientific and Shire Pharmaceutical. Boston, a medical equipment company, is an undervalued turnaround story with an interesting pipeline of new products which is driving an acceleration in revenues and a sharp, and generally unanticipated, expansion in margins. Shire is a specialist pharmaceutical company with extremely attractive growth prospects, one of the strongest balance sheets among its peers and an outstanding management team.

Positive performance in banks came from investments in Mitsubishi UFJ Financial Group and Barclays. MUFG, Japan's largest bank, is benefiting operationally from a reasonably benign domestic business environment and a growing contribution from overseas activities. Capital strength is high with buybacks having been announced both in 2014 and 2015. As the group steps up sales of strategic share holdings, capital returns may further increase. Barclays is clearly changing its spots. In the same way as UBS and Morgan Stanley before it, Barclays' ambitions to be a top player across all aspects of investment banking have been abandoned, and the focus is now very much on core retail and commercial banking. With new executive management and a new chairman the focus on costs is intense and the path to higher returns and valuation is reasonably clear.

In Industrials, our holding in Electrolux, the Swedish appliance company, is benefiting from the significant restructuring of its industrial footprint undertaken both in Europe and the US over recent years. As Europe recovers and as housing-related activity in the US continues to normalise, the potential for operational gearing into these trends is significant.

First Quantum (copper producer) was a significant detractor last year. Despite very visible growth prospects, excellent management and our strong longer-term preference for copper relative to most other metals, a 20% decline in the commodity took its toll on the stock price. Having fortified its balance sheet in May, First Quantum remains very well positioned, and extremely cheap, in our scenario of an eventual bottoming-out in the copper price. We have therefore added to our holding. Outokumpu (stainless steel) was also one of our worst performers last year. Despite a large decline in the price of nickel (which informs the price of stainless steel) and an escalation of import pressure from China, we have been happy to add to this investment following significant restructuring of its core European operations, cyclical recovery and our belief that Chinese exports will decelerate.

So how do we position the portfolio for a continuation of positive performance over the next few years?

Our strategy continues to deviate significantly from the regional and industrial structure of its benchmark. It's important to emphasise that our exposure is determined not by sweeping macro or top down views but by company-specific valuation signals derived from intensive company research and long term cash flow models. The latter creates a strong valuation discipline which forms the bedrock of all stock selection decisions.

Despite a very high representation in areas such as internet, software and even retail, which are all in the vanguard of structural change, we are also very happy to have investments in companies which are cheap according to more 'traditional' reasons such as cyclical recovery, restructuring, new management and, in the longer term, emerging market growth. We would place the above-mentioned First Quantum and Outokumpu in this category but also the likes of Citigroup, LafargeHolcim, Wolseley and SABMiller. SAB is a case in point: the stock has underperformed as exposure to declining growth rates in emerging markets such as Columbia, South Africa and China, coupled with weakening currencies, have eroded near term profits forecasts. The investment attractions, however, remain very strong longer term and we have recently added to our position. SAB is positioned well for the expansion of beer as a category in LatAm and Africa. Additionally, the company will benefit from the recent appointment of a new chairman and a new chief financial officer and potential consolidation in the industry.

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. In Japan we are very mindful that the Japanese government's initiative to boost return on equity and shareholders' return could mark a steep change in corporate governance which could unlock significant value for shareholders. We are still at a very early stage, however, and we are still meeting with too many companies which have failed to address the competitiveness of their businesses in a new and harsher global context. Selectively we are finding opportunities in companies like Daikin, which is a global leader in air conditioning equipment, or Japan Airlines, which has restructured its business and its culture comprehensively since its bankruptcy filing in 2010.

Notable sector exposure includes a large position in airlines through Japan Airlines, Ryanair and United Continental, each of which have very powerful stock specific catalysts in addition to enjoying the overall benefit of lower oil prices. Our exposure to financials has increased following the purchase of Bankia in Spain, UniCredit in Italy, Aviva in the UK and Mitsui Fudosan in Japan. A powerful combination of valuation, balance sheet options, and a very healthy market for commercial real estate in Tokyo - not to mention the forthcoming Olympics in 2020 - gives us the confidence to maintain a large position in Mitsui. Purchases in Auto Trader, Dixons Carphone, TJX, Amazon and Facebook have resulted in a large position in retail and media. We remain tilted towards more cyclical areas and continue to hold no utilities or REITs.

With gearing at around 7% we remain constructive on the outlook for global equity markets, although, after a phenomenal rise over the last few years, future returns are likely to be more modest. In the US, after some sharp downward revisions required by the rise in the US dollar and fall in the oil price, earnings estimates have stabilised in recent months. Even with operating margins close to record levels, revenue gains are still being enhanced by operating margin improvement. In Europe, the recovery is broadening, as seen in improving economic confidence, as well as continued easing in credit conditions. In contrast to the US, where the expansion is reasonably mature, Europe is in the early stages of a rebound from the double-dip recession. When we look at the differential between earnings in the US and earnings in Europe and returns on equity between the two regions, we believe that a recovery in Europe should encourage a move towards normalisation in these relationships. Quantitative easing in Japan, as well as Europe, should continue to be supportive of equities in addition to the improvements which are taking place at a corporate level. Currently the main conundrum concerns the growth rate in China. Despite official GDP growth numbers of around 7%, other factors, like the weakness of commodities and of industrial production in the rest of emerging Asia, seem consistent with much weaker growth in China. Although there is plenty of scope for the Chinese authorities to introduce further measures to stimulate growth we are hesitant to increase our exposure to companies with high Chinese exposure in the absence of very compelling valuations and clear stock-specific catalysts.

The use of capital remains a very important theme and a differentiator in the current market. In the US, stock buybacks at record levels are boosting earnings growth to a significant degree, although the market is rewarding buybacks less these days; a logical response to the much higher prices that companies now have to pay when repurchasing their own shares. The world ex US is, however, picking up the pace on buybacks, particularly in Japan. Globally, the M&A cycle is in full swing, driven by abundant cash flow and cheap financing.

Our focus remains, as ever, on underlying company fundamentals and our dedicated team of highly experienced research analysts continue to identify attractive investment opportunities around the world.

Jeroen Huysinga

Investment Manager

25th September 2015

Principal Risks

With the assistance of the Manager, the Board has drawn up a risk matrix, which identifies the key risks to 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. 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 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.

•     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 2015 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 2015 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 25 of the Company's 2015 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 26 on pages 60 to 66 of the Company's 2015 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.

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 accounts are published on the www.jpmoverseas.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 22 and 23 of the Company's 2015 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 strategy and business model of the Company.

For and on behalf of the Board
Simon Davies
Chairman

25th September 2015

Financial Statements

Income Statement

for the year ended 30th June 2015

	2015			2014
	Revenue	Capital	Total	Revenue	Capital	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Gains on investments held at fair value through profit or loss	-	22,974	22,974	-	31,243	31,243
Net foreign currency gains/(losses)	-	4,579	4,579	-	(1,609)	(1,609)
Income from investments	4,675	-	4,675	4,405	-	4,405
Other interest receivable and similar income	29	-	29	73	-	73
Gross return	4,704	27,553	32,257	4,478	29,634	34,112
Management fee	(553)	(553)	(1,106)	(499)	(499)	(998)
Performance fee	-	(1,036)	(1,036)	-	(1,791)	(1,791)
Other administrative expenses	(584)	-	(584)	(497)	-	(497)
Net return on ordinary activities before finance costs and taxation	3,567	25,964	29,531	3,482	27,344	30,826
Finance costs	(149)	(149)	(298)	(212)	(212)	(424)
Net return on ordinary activities before taxation	3,418	25,815	29,233	3,270	27,132	30,402
Taxation	(380)	-	(380)	(355)	-	(355)
Net return on ordinary activities after taxation	3,038	25,815	28,853	2,915	27,132	30,047
Return per share - undiluted (note 3)	13.19p	112.10p	125.29p	12.41p	115.55p	127.96p
Return per share - diluted (note 3)	13.08p	111.16p	124.24p	12.41p	115.55p	127.96p

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. The Total column represents all the information that is required to be disclosed in a Statement of Total Recognised Gains and Losses ('STRGL'). For this reason a STRGL has not been presented.

Reconciliation of Movements in Shareholders' Funds

	Called up	Share	Capital
	share	premium	redemption	Capital	Revenue
	capital	account	reserve	reserves	reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000
At 30th June 2013	6,592	734	27,401	167,955	18,463	221,145
Repurchase of shares into Treasury	-	-	-	(4,553)	-	(4,553)
Exercise of Subscription shares into Ordinary shares	(3)	3	-	-	-	-
Issue of Ordinary shares on exercise of Subscription shares	71	2,476	-	-	-	2,547
Net return on ordinary activities	-	-	-	27,132	2,915	30,047
Dividends appropriated in the year	-	-	-	-	(3,551)	(3,551)
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 appropriated in the year	-	-	-	-	(3,463)	(3,463)
At 30th June 2015	6,814	9,317	27,401	208,191	17,402	269,125

Balance Sheet

at 30th June 2015

	2015	2014
	£'000	£'000
Fixed assets
Investments held at fair value through profit or loss	289,301	265,685
Investment in liquidity fund held at fair value through profit or loss	6,792	-
	296,093	265,685
Current assets
Derivative financial assets	1,120	1,361
Debtors	1,256	1,639
Cash and short term deposits	1,169	2,568
	3,545	5,568
Creditors: amounts falling due within one year	(26,799)	(23,340)
Derivative financial liabilities	(1,842)	(735)
Net current liabilities	(25,096)	(18,507)
Total assets less current liabilities	270,997	247,178
Creditors: amounts falling due after more than one year	(200)	(200)
Provisions for liabilities and charges
Performance fee payable	(1,672)	(1,343)
Net assets	269,125	245,635
Capital and reserves
Called up share capital	6,814	6,660
Share premium account	9,317	3,213
Capital redemption reserve	27,401	27,401
Capital reserves	208,191	190,534
Revenue reserve	17,402	17,827
Total equity shareholders' funds	269,125	245,635
Net asset value per share - undiluted (note 4)	1,163.0p	1,054.9p
Net asset value per share - diluted (note 4)	1,137.6p	1,036.7p

Company registration number: 24299.

Cash Flow Statement

for the year ended 30th June 2015

	2015	2014
	£'000	£'000
Net cash inflow from operating activities	1,898	2,545
Returns on investments and servicing of finance
Interest paid	(294)	(422)
Net cash outflow from returns on investments and servicing of finance	(294)	(422)
Taxation
Taxation recovered	51	115
Capital expenditure and financial investment
Purchases of investments	(250,024)	(164,561)
Sales of investments	241,420	171,763
Other capital charges	(14)	(15)
Net cash (outflow)/inflow from capital expenditure and financial investment	(8,618)	7,187
Dividend paid	(3,463)	(3,551)
Net cash (outflow)/inflow before financing	(10,426)	5,874
Financing
Issue of Ordinary shares on exercise of Subscription shares	6,258	2,547
Repurchase of shares into Treasury	(8,158)	(5,068)
Repayment of bank loan	(20,000)	-
Drawdown of bank loan	25,000	-
Net cash inflow/(outflow) from financing	3,100	(2,521)
(Decrease)/increase in cash for the year	(7,326)	3,353

Notes to the Financial Statements

for the year ended 30th June 2015

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') 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 January 2009.

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

The financial statements have been prepared on a going concern basis under the historical cost convention as modified by the revaluation of investments and derivative financial instruments at fair value through profit or loss.

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

2.   Dividends

(a)  Dividends paid and proposed

		2015	2014
		£'000	£'000
	Dividend paid
	Unclaimed dividends refunded to the Company	(4)	(5)
	2014 final dividend of 15.0p (2013: 15.0p)	3,467	3,556
	Total dividends paid in the year	3,463	3,551
	Dividend proposed
	2015 final dividend proposed of 16.0p (2014: 15.0p)	3,702	3,493

For the year ended 30th June 2014, the Company declared a dividend of £3,493,000 but the final dividend paid amounted to £3,467,000 due to share buybacks after the balance sheet date but prior to the share register record date.

The final dividend proposed in respect of the year ended 30th June 2015 is subject to approval at the forthcoming Annual General Meeting. In accordance with the accounting policy of the Company, this dividend will be reflected in the accounts for the year ending 30th June 2016.

(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, as follows:

		2015	2014
		£'000	£'000
	Final dividend payable of 16.0p (2014: 15.0p)	3,702	3,493
	Total dividends for Section 1158 purposes	3,702	3,493

The revenue available for distribution by way of dividend for the year is £3,038,000 (2014: £2,915,000).

3.   Return per share

		2015	2014
		£'000	£'000
	Revenue return	3,038	2,915
	Capital return	25,815	27,132
	Total return	28,853	30,047
	Weighted average number of Ordinary shares in issue during the period used for the purpose of the undiluted calculation	23,027,715	23,480,245
	Weighted average number of Ordinary shares in issue during the period used for the purpose of the diluted calculation	23,222,638	23,480,245
	Undiluted
	Revenue return per share	13.19p	12.41p
	Capital return per share	112.10p	115.55p
	Total return	125.29p	127.96p
	Diluted
	Revenue return per share	13.08p	12.41p
	Capital return per share	111.16p	115.55p
	Total return	124.24p	127.96p

The diluted return per Ordinary 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 the requirements of Financial Reporting Standard 22 'Earnings per share'.

4.   Net asset value per share

		2015	2014
	Undiluted
	Ordinary shareholders' funds (£'000)	269,125	245,635
	Number of Ordinary shares in issue	23,140,517	23,284,602
	Net asset value per Ordinary share (pence)	1,163.0	1,054.9
	Diluted
	Ordinary shareholders funds assuming exercise of Subscription shares (£'000)	307,431	288,293
	Number of potential Ordinary shares in issue	27,025,559	27,808,297
	Net asset value per Ordinary share (pence)	1,137.6	1,036.7

5.   Status of announcement

     2014 Financial Information

      The figures and financial information for 2014 are extracted from the Annual Report and Accounts for the year ended 30th June 2014 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.

      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 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.

The annual report will also shortly be available on the Company's website at www.jpmoverseas.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

25th September 2015

For further information please contact:

Divya Amin

For and on behalf of

JPMorgan Funds Limited, Secretary                                                                                                                                                                                                                                                                                                       

020 7742 4000

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.jpmoverseas.co.uk

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

 

END

 

 

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