Half-yearly report

Jupiter Green Investment Trust Plc Unaudited Interim Results for the six months to 30 September 2010                   Chairman's Statement       I am pleased to present the Interim Report for the Jupiter Green Investment Trust for the six months to 30 September 2010.       Conflicting macro economic forces led to a volatile period for equity investors. The sovereign debt crisis and slowing growth rates in China and the US troubled the market at the start of the period. This was offset by reasonably healthy corporate results with companies reaping the benefits from cost cutting measures undertaken during the recession. As the period drew to a close economic data in the West was more promising and developing market economies regained momentum. In the final month of the period, the stock market showed particular confidence following indications from the US Federal Reserve that it would increase its attempts to boost US economic growth.       The period under review was difficult for the green investment sector with alternative energy companies coming under particular pressure. This was caused by a combination of increasing fiscal austerity in the West and low expectations for long term gas prices. As a result, the Trust underperformed the mainstream market during the period. The manager's long term conviction in these sectors remains undiminished, however. Many companies in this sector are now lowly priced in light of the fact that growth in the low carbon technology market is forecast to be substantial in the coming decade.       During the period under review your Company's total assets fell by 6.3 per cent. to £40,833,000. This compares with a fall in the Company's benchmark index, the MSCI World Small Cap Index of 1.7 per cent. over the same period.       The diluted Net Asset Value of the Company's Ordinary shares, which is the Net Asset Value that would apply to the Ordinary shares in the event that all Warrants in issue were to be exercised, fell by 5.3 per cent. to 99.91p during the period under review, whilst their middle market price fell by 11.8 per cent. to 80.75p. The undiluted Net Asset Value per Ordinary share fell by 6.3 per cent. to 99.91p. The middle market price of the Warrants fell by 62.7 per cent. to 1.5p.       In the Trust's Annual Financial Report, I mentioned that the Board was in the process of implementing a number of changes that we believe are in the best interests of shareholders. In this report you will note that several of these changes have come in effect. On 1 July, Jupiter Asset Management took over the management of the Company's entire investment portfolio ending the management agreement the Trust had with Winslow in the US. This had been done to encourage a more flexible geographical asset allocation by the portfolio manager, Charlie Thomas. You will note in his manager's report that Charlie performed a review of the US portion of the portfolio and, following meetings with the management teams of nearly 50 US companies, has made a number of alterations. You will also note that the Trust's benchmark index has changed to the total return on the MSCI World Small Cap Index, expressed in Sterling. The adoption of a single, readily accessible benchmark index was considered prudent in light of the centralisation of the management of the Company's investment portfolio.       I recommend you to read the Manager's Review in which he discusses both challenges and opportunities for the Trust during the period. He also discusses the longer-term prospects for the green investment sector as the balance of economic power shifts to emerging markets which are beginning to take a lead in green policy and investment. At a time when political change in the US has stalled green policy, China has identified a number of environmental themes as part of its seven 'new strategic industries' that are expected to have an important role in the country's long term growth. Closer to home, meanwhile, the UK government has shown encouraging support for the development of a low carbon economy during its Comprehensive Spending Review. It has protected funding for a number of green projects and has set aside funds for the establishment of the Green Investment Bank designed to facilitate investment in large-scale environmental infrastructure projects.       The Trust continues to invest in businesses operating in six green themes: clean energy, green transport, environmental solutions, waste management, water management and sustainable living. While fiscal imbalances have led to changes in the global green investment landscape, it goes without saying that the Trust's investment thesis remains undiminished on both environmental and economic grounds. Fiscal problems facing the West may have led to more realistic expectations for green policies and business growth in Europe, the UK and the US. However, the significant policy and investment growth in the Far East and other emerging markets is largely expected to pick up the slack. This is not only forecast to help resolve domestic environmental issues, but to assist cash- strapped Western governments in meeting environmental targets through the trade of more affordable products and services. For the Trust, the Far Eastern growth in the green sector is a particular benefit as it expands the Trust's investment opportunities. Despite the broader economic imbalances, there appears to be much to be optimistic about for those wishing to invest in businesses proactively involved in the transition to a lower carbon global economy.       Interim Report       Given the nature of the Jupiter Green Investment Trust, the Board believes that it is important to lead by example in saving energy and resources. As a result, this year it has been decided that the Interim Report will not automatically be sent to shareholders. It will of course be available in hard copy on request from the Company Secretary and as usual will be available at http://www.jupiteronline.co.uk/PI/Our_Products/Investment_Companies/Green/ for download.       P K O Crosthwaite       Chairman       29 November 2010       Manager's Review       Performance Review       For the six months ended 30 September 2010, the total return for the Trust was -6.3 per cent.* compared to returns of -1.7 per cent.* for the Trust's benchmark, the MSCI World Small Cap Index.       Market and Policy Review       Global equity markets were volatile in the six months to 30 September 2010. Initially, sentiment was weighed down by the sovereign debt crisis in southern Europe and indications that economic growth in the US and China was moderating. A €750bn bail-out package to support ailing eurozone countries offered some relief. But markets remained subdued until July when European banks stress tests concluded that the banking sector was undercapitalised by a modest €3.5bn - far lower than the market was expecting. As the period came to an end, the market rallied strongly in anticipation of a return to quantitative easing from the US Federal Reserve. With government bond yields falling to historic lows, equities looked particularly cheap. Throughout the period, corporate profits generally beat market expectations. Fund performance       The Fund lost ground in absolute terms and underperformed its broad-based global small cap benchmark.       For the Fund, stocks from our clean energy theme, particularly the wind sector, impeded performance. This was due to fears of a near-term drop in demand on the back of a slowdown in global growth, pressures on public sector spending in the West and a generally benign outlook for long-term gas prices. Vestas Wind Systems was the largest detractor from performance after guiding down forecasts due to delays in orders for 2010 rolling into its 2011 revenue stream. While this was discouraging, the stock was de-rated to a pessimistic valuation in our view. Order flow for the businesses has picked up in recent months and contract terms or pricing have stabilised. Infigen Energy lost ground after management pulled the sale of US assets due to an unfavourable pricing environment that was largely being driven by low gas prices. We believe the management's decision is positive for the long term outlook for the company.       From the US portfolio, Horsehead Holdings (waste management) detracted from performance. The company recycles metals such as zinc and aluminium and was sold down due to weakness in commodity markets during the middle of the period. The stock has since recovered and is well placed to benefit from long term supply/demand imbalances in commodity markets which are being driven by growth in emerging market economies.       There were several highlights across the portfolio during the period. Key US holding First Solar (clean energy), which manufactures solar modules and systems for utility-scale power plants, made good progress on the back of strong earning results. In the UK, engineering group WS Atkins (environmental services) rallied off a low valuation. The business is highly cash generative and is expanding its Far Eastern operations.       From 1 July, we brought the management of the US portion of the portfolio in-house (roughly 35 per cent. of the total). We have since reviewed all US holdings and have made a number of adjustments without changing our overall exposure to the US. Most notably, we sold out of core positions in Acuity Brands (lighting) and Prologis (real estate), replacing them with Itron (smart grid technologies) and Whole Foods Market (leader in the organic and high welfare food sector) which we believed offer better exposure to core environmental growth trends in the US. First Solar remains our largest US holding.       Investment outlook       Equities are generally lowly priced and have responded positively in recent weeks to expectations that a double-dip recession will be avoided and to the reintroduction of the US Federal Reserve's asset purchase programme. This should support the market in the near future, although inflation levels must be watched closely.       In the aftermath of the Western financial crisis, environmental investment is experiencing a number of thematic and geographic changes. Vastly divergent fiscal positions between China and the West are leading to rapid growth in environmental investment in the former at the expense of the competitive position of the latter. For this reason, we have been increasing our focus on potential long-term investment opportunities in Asia, including Western businesses with strong links to growth in that region.       China now has some of the strongest environmental policies in the world. Its twelth five year plan, agreed in October, set aside $600bn for investment in seven 'new strategic industries'. These are industries earmarked to play an important role in the country's long term growth, including energy conservation and environmental protection, as well as alternative energy and low-emission vehicle technology sectors.       This progress in China is in stark contrast to the US, where the short- term outlook for environmental policy has become quite uncertain following the swing to the right in the US mid-term elections. However, we believe issues such as energy security and the need for more jobs should continue to drive growth in environmental investment in the US despite any short term setbacks. Additionally, the country's poor fiscal position is likely to benefit those businesses involved in efficiency and innovation rather than high cost infrastructure projects in the near term, hence the purchase of Itron during the period under review.       Interestingly, the UK government's recent Comprehensive Spending Review was encouraging and showed the UK's ongoing commitment to the environmental agenda despite the country's fiscal challenges. Amid deep cuts across the public sector, feed-in tariffs for small-scale renewable energy were generally unaffected and further funds were pledged to support low-carbon technologies and establish the Green Investment Bank.       Notwithstanding the fiscal challenges in the West, environmental solutions sectors are expected to have a strong growth trajectory. In a recent report ('Sizing the climate economy'), HSBC forecasts a tripling of the low-carbon energy market between now and 2020 based on three key drivers: climate change concern, energy/resource security and innovation.       At the company level, we continue to be impressed by positive results and the return of confidence in several companies. Merger and acquisition activity has picked up, with several holdings creating new alliances to boost growth. Since the start of the year we have also seen considerable IPO activity from businesses in the US, Europe and most notably in Asia. These have received very strong investor interest with some Asian based listings being heavily oversubscribed.       Although mindful of the significant challenges facing the Western economy, we continue to believe the long-term outlook for green investments is very compelling indeed.       Charles Thomas       Jupiter Asset Management Limited       29 November 2010       *  Source: Jupiter Asset Management Statement of Comprehensive Income for the six months to 30 September 2010 (unaudited)   Six months to Six months to  30 September 2010  30 September 2009   Revenue Capital   Revenue Capital   Return Return Total Return Return Total   £'000 £'000 £'000 £'000 £'000 £'000 (Loss)/gain on  investments  at fair value (Note 2) - (3,092) - - 12,009 12,009 Foreign exchange gain/(loss) 7 325 332 (26) (2,001) (2,027) Income 369 - 369 391 - 391 -------------------------------------------------------------------------------- Total income 376 (2,767) (2,391) 365 10,008 10,373 -------------------------------------------------------------------------------- Investment management fee (17) (157) (174) (170) - (170) Other expenses (165) - (165) (153) - (153) -------------------------------------------------------------------------------- Total expenses (182) (157) (339) (323) - (323) -------------------------------------------------------------------------------- Profit before finance costs and taxation 194 (2,924) (2,730) 42 10,008 10,050 Finance costs - - - - - - -------------------------------------------------------------------------------- Profit before taxation 194 (2,924) (2,730) 42 10,008 10,050 Taxation (27) - (27) (30) - (30) -------------------------------------------------------------------------------- Profit and total comprehensive income for the period 167 (2,924) (2,757) 12 10,008 10,020 -------------------------------------------------------------------------------- Basic Return per Ordinary share (Note 3) 0.41p (7.15)p (6.74)p 0.03p 22.75p 22.78p -------------------------------------------------------------------------------- Diluted Return per Ordinary share (Note 3) 0.41p (7.15)p (6.74)p 0.03p 22.75p 22.78p -------------------------------------------------------------------------------- The Company does not have any income or expense that is not included in profit for the period, and therefore the "Profit for the period" is also the "Total comprehensive income for the period", as defined in International Accounting Standard 1 (revised). All of the profit and total comprehensive income for the period is attributable to the owners of the Company. The total column of this statement is the Statement of Comprehensive Income of the Company prepared in accordance with IFRS. The supplementary revenue return and capital return columns are both prepared under guidance produced by the Association of Investment Companies. All items in the above statement derive from continuing operations. The financial information does not constitute 'accounts' as defined in section 434 of the Companies Act 2006. Statement of Financial Position as at 30 September 2010   30 September 2010 31 March 2010   (unaudited) (audited)   £'000 £'000 Non current assets Investments held at fair value through profit or loss 39,540 42,870 -------------------------------------------------------------------------------- Current assets Prepayments and accrued income 53 102 Sales awaiting settlement 180 - Cash and cash equivalents 1,497 939 --------------------------------------------------------------------------------   1,730 1,041 -------------------------------------------------------------------------------- Total assets 41,270 43,911 Current liabilities Accruals (192) (115) Purchases awaiting settlement (245) (206) -------------------------------------------------------------------------------- Total assets less current liabilities 40,833 43,590 -------------------------------------------------------------------------------- Capital and reserves Called up share capital 44 44 Share premium 26,229 26,229 Redemption reserve 226 226 Special reserve 24,292 24,292 Retained earnings (Note 5) (9,958) (7,201) -------------------------------------------------------------------------------- Total equity shareholders' funds 40,833 43,590 -------------------------------------------------------------------------------- Net Asset Value per Ordinary share 99.91p 106.65p (Note 6) -------------------------------------------------------------------------------- Diluted Net Asset Value per Ordinary share (Note 99.91p 105.53p 6) -------------------------------------------------------------------------------- Statement of Changes in Equity for the six months to 30 September 2010 For the six months to Share Share Special Redemption Retained 30 September 2010 Capital Premium Reserve Reserve Earnings Total (unaudited) £'000 £'000 £'000 £'000 £'000 £'000 Balance at 31 Mar 2010 44 26,229 24,292 226 (7,201) 43,590 Net return for the period - - - - (2,757) (2,757) ----------------------------------------------------------------------------- Balance at 30 Sept 2010 44 26,229 24,292 226 (9,958) 40,833 ----------------------------------------------------------------------------- For the six months to Share Share Special Redemption Retained 30 September 2009 Capital Premium Reserve Reserve Earnings Total (unaudited) £'000 £'000 £'000 £'000 £'000 £'000 Balance at 31 Mar 2009 44 26,228 24,292 226 (16,981) 33,809 Net return for the period - - - - 10,020 10,020 Ordinary shares issued - 1 - - - 1 ---------------------------------------------------------------------------- Balance at 30 Sept 2009 44 26,229 24,292 226 (6,961) 43,830 ---------------------------------------------------------------------------- Cash Flow Statement for the six months to 30 September 2010 (unaudited)   Six months to Six months to  30 September 2010  30 September 2009   £'000 £'000 Cash flows from operating activities Investment income received 400 405 Deposit interest received 1 6 Other cash receipts - 1 Investment management fee paid (92) (79) Realised loss on foreign currency (179) (61) Other cash expenses (154) (180) -------------------------------------------------------------------------------- Cash generated from operations (24) 92 Taxation (27) (30) -------------------------------------------------------------------------------- Net cash (outflow)/inflow from operating (51) 62 activities -------------------------------------------------------------------------------- Cash flows from investing activities Purchases of investments (5,825) (7,081) Sales of investments 6,434 5,909 -------------------------------------------------------------------------------- Net cash inflow/(outflow) from investing activities 609 (1,172) -------------------------------------------------------------------------------- Cash flows from financing activities Shares issued - 1 -------------------------------------------------------------------------------- Increase / (decrease)  in cash 558 (1,109) Cash and cash equivalents at start of 939 5,162 period -------------------------------------------------------------------------------- Cash and cash equivalents at end of period 1,497 4,053 -------------------------------------------------------------------------------- NOTES TO THE FINANCIAL STATEMENTS 1.        Accounting Policies The accounts comprise the unaudited financial results of the Company for the six month period from 1 April 2010 to 30 September 2010. The accounts are presented in pounds sterling, as this is the functional currency of the Company. The accounts have been prepared in accordance with International Financial Reporting Standards (IFRS) adopted by the International Accounting Standards Board (IASB), and interpretations issued by the International Financial Reporting Interpretations Committee of the IASB (IFRIC). A summary of the principal accounting policies, all of which have been applied consistently throughout the period, is set out below: Revenue, Expenses and Interest Payable Revenue includes dividends from investments quoted ex-dividend on or before the date of the Statement of Financial Position. Income on fixed income securities is recognised on a time apportionment basis according to the period for which these investments are held. Deposit and other interest receivable, expenses and interest payable are accounted for on an accruals basis. An analysis of retained earnings broken down into revenue (distributable) items and capital (non- distributable) items is given in Note 5. In arriving at this breakdown, expenses have been presented as revenue items except as follows: * expenses which are incidental to the purchase or sale of an investment are included in the cost or deducted from the proceeds of the investment (see Note 4). * any performance fees payable are allocated wholly to capital, reflecting the fact that, although they are calculated on a total return basis, they are expected to be attributable largely, if not wholly, to capital performance. * 90 per cent. of the investment management fee is charged to capital. Investments All investments are classified as held at fair value through profit or loss. All investments are measured at fair value with changes in their fair value recognised in the income statement. The fair value of listed investments is based on their quoted bid market price at the date of the Statement of Financial Position without any deduction for estimated future selling costs. 2.        Gains on Investments   Six months to Six months to  30 September 2010  30 September 2009   £'000 £'000 Net loss realised on sale of investments (1,105) (2,617) Movement in unrealised gains (1,987) 14,626 ------------------------------------------------------------------------------ (Loss)/gain on investments (3,092) 12,009 ------------------------------------------------------------------------------ 3.      Earnings per Ordinary share The earnings per Ordinary share figure is based on the net loss for the six months of £2,757,000 (six months to 30 September 2009: profit £10,020,000) and on 40,869,929 (six months to 30 September 2009:43,988,009) Ordinary shares, being the weighted average number of Ordinary shares in issue during the period. The earnings per Ordinary share figure detailed above can be further analysed between revenue and capital, as below.   Six months to Six months to  30 September 2010  30 September 2009   £'000 £'000 Net revenue profit 167 12 Net capital (loss)/profit (2,924) 10,008 -------------------------------------------------------------------------------- Net total (loss)/profit (2,757) 10,020 -------------------------------------------------------------------------------- Weighted average number of Ordinary shares in issue during the period 40,869,929 43,988,009 Revenue earnings per Ordinary share (p) 0.41 0.03 Capital earnings per Ordinary share (p) (7.15) 22.75 -------------------------------------------------------------------------------- Total earnings per Ordinary share (p) (6.74) 22.78 -------------------------------------------------------------------------------- The Warrants in issue are non dilutive for the period to 30 September 2010. 4. Transaction Costs The following transaction costs were incurred during the period:   Six months to Six months to  30 September 2010  30 September 2009   £'000 £'000 Purchases  17  12 Sales  15  14 -----------------------------------------------------    32  26 ----------------------------------------------------- 5.      Retained earnings The table below shows the movement in the retained earnings analysed between revenue and capital items.   Revenue Capital Total   £'000 £'000 £'000 At 31 March 2010 (32) (7,169) (7,201) Movement during the period: Net profit for the period 167 2,924 (2,757) ------------------------------------------------------------ At 30 September 2010 135 (10,093) (9,958) ------------------------------------------------------------ 6.     Net Asset Value per Ordinary share The Net Asset Value per Ordinary share is based on the net assets attributable to the Ordinary shareholders of £40,833,000 (31 March 2010: £43,590,000) and on 40,869,929 (31 March 2010: 40,869,929) Ordinary shares, being the number of Ordinary shares in issue at the period end. The Warrants in issue are non dilutive for the period to 30 September 2010. 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. Details of related party transactions are contained in the Annual Report and Accounts 2010 and in this Interim Report. 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 -        accounting, legal and regulatory -        operational, and -        financial, such as market price risk and foreign currency risk. Information on these risks is set out in the Annual Report and Accounts 2010. In the view of the Board these principal risks and uncertainties are applicable to the remaining six months of the year as they were to the six months under review. Directors' Responsibility Statement We the Directors of Jupiter Green Investment Trust PLC confirm to the best of our knowledge: a. the condensed set of financial statements have been prepared in accordance with the Accounting Standards Board's statement 'Half-Yearly Financial Reports'; b. the Chairman's Statement, Manager's Review, and 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. By order of the Board P K O Crosthwaite Chairman 29 November 2010 Investment Objective The Company's investment policy is to generate long-term capital growth through a diverse portfolio of companies providing environmental solutions. Full details of the Company's investment policy can be found in the 2010 Interim Report. The Interim Report will be available on the Company's website at http://www.jupiteronline.co.uk/PI/Our_Products/Investment_Companies/Green/ for download. Copies may also 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 [HUG#1466732] This announcement is distributed by Thomson Reuters on behalf of Thomson Reuters clients. The owner of this announcement warrants that: (i) the releases contained herein are protected by copyright and other applicable laws; and (ii) they are solely responsible for the content, accuracy and originality of the information contained therein. Source: Jupiter Green Investment Trust PLC via Thomson Reuters ONE

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