Final Results

RNS Number : 4159P

Mercantile Investment Trust(The)PLC

24 March 2009

 



LONDON STOCK EXCHANGE ANNOUNCEMENT

THE MERCANTILE INVESTMENT TRUST PLC

AUDITED FINAL RESULTS FOR THE YEAR ENDED 31ST JANUARY 2009

Chairman's Statement

Over the year to 31st January 2009, the 124th year since the Company was founded, the Company's total return on net assets (i.e. with net income reinvested) was -39.3%, which compares with a return of -36.2% on the same basis from the Company's benchmark index, the FTSE All-Share (excluding FTSE 100 constituents and investment trusts). Conditions in the financial markets globally and particularly in the UK economy were the worst for decades and the Company's performance was very adversely affected despite the fact that the Company was in a net cash position for substantial periods throughout the year.

Earnings and Dividends

Earnings per share increased by 4.9% for the year, from 39.79p to 41.73p partly due to the receipt of a number of special dividends, a higher level of deposit interest income and the receipt of further VAT recoveries and interest thereon.

The Company has paid three interim dividends of 6.0p per ordinary share, and the Directors have declared a fourth quarterly interim dividend of 18.0p, giving a total dividend of 36.0p for the year, an increase of 5.9% on last year's baseline dividend of 34.0p. The Board recognises that it is essential to make an appropriate distribution, which both meets shareholders' legitimate expectations, and is prudent in light of what may be continued difficult times ahead. With this in mind, the Board feels it appropriate not to declare a special dividend in order to distribute the VAT and related interest recovered during the year, the additional amount, of 3p per share, being included in the baseline dividend.

The Board intends therefore to continue to pay three interim dividends at the current rate of 6.0p per ordinary share throughout the year ending 31st January, 2010. The level of the fourth quarterly interim dividend will be determined by the Board based on the level of income received by the Company during the year and with regard to the Company's very strong residual revenue reserve of 40.0p per share.

Share Price Discount

The share price fell by 41.9% during the year and, including dividends paid, the total return to shareholders was -39.2%. The discount to net asset value was 9.2% compared to 10.5% (with debt at fair value) a year ago. The average daily discount, with debt at fair value, during the year was 10.5%.

Share Repurchases

During the year under review a total of 1.98m shares were repurchased for cancellation, amounting to 1.9% of issued share capital at the beginning of the year, at a total cost of £17.59 million. Share repurchases during the year under review have added approximately 2.4 pence to the net asset value per share. 

The Board's objective remains to use the share repurchase authority to manage imbalances between the supply and demand of the Company's shares, thereby reducing the volatility of the discount. To date the Board believes this mechanism has been helpful and therefore proposes and recommends that the powers to repurchase up to 14.99% of the Company's shares for cancellation be renewed for a further period.

Gearing

The Company ended the year with a gearing factor of 102.8% geared. During the year the gearing varied between 89% and 103%. It is the Board's intention to continue to operate within the range of 90 to 120% invested, under normal market conditions, although at the present time, the Board is maintaining gearing at the lower end of the range.

The Board elected not to renew the £70 million 364 day revolving credit facility in place with Lloyds TSB, which was never drawn down and expired on 4th March 2008.

VAT case

Following the successful outcome, in November 2007, of the action brought by the AIC and JPMorgan Claverhouse Investment Trust plc challenging the imposition of VAT on management fees for investment trust companies, in December 2008 the Board reached agreement with the Company's Manager, JPMorgan Asset Management (UK) Limited ('JPMAM'), on the recovery of past VAT. The total recovery by the Company from HM Revenue & Customs and JPMAM, including interest, was £10,132,000 and this was all reflected in the Company's net asset value by 23rd December 2008. As reported in last year's Annual Report, the Board retained Noble Grossart to act on behalf of the Company in this matter.

Board

There have been no Board changes during the year under review. The Board takes into account the ongoing requirements of the Combined Code, including the need to refresh the Board and its Committees. Directors conduct a self-assessment of their performance each year. A report is made to the Nomination Committee which meets annually to evaluate the performance of the Board, its Committees and the individual Directors. The Chairman reports the findings of the Nomination Committee to the Board.

No re-election of Directors is required this year other than myself. Having been a Director for more than nine years, in accordance with the Board's policy, I offer myself for re-election on an annual basis only.

Investment Managers

The Company's investment management team comprises Martin Hudson, who was appointed in 1993, and Jane Lennard, who was appointed in 2006. Emel Akan left the team, and will be replaced by a graduate recruit later in 2009.

The Board continues to monitor the performance of the Manager on a regular basis. The notice period with respect to the Management Contract has been shortened to six months from one year, in line with market practice.

Annual General Meeting

The Company's one hundred and twenty third Annual General Meeting will be held at Trinity House, Tower Hill, London EC3N 4DH on Wednesday 29th April 2009 at 12.00 noon. In addition to the formal part of the meeting, there will be a presentation from the Investment Managers who will answer questions on the portfolio and performance. The meeting will be followed by a buffet lunch which will give shareholders an opportunity to meet the Board, the Investment Managers and representatives of JPMAM. I look forward to seeing as many of you as possible at the meeting.

Please submit in writing any detailed questions that you wish to raise at the AGM to the Company Secretary at Finsbury Dials, 20 Finsbury Street, London EC2Y 9AQ or via the website at www.mercantileit.co.uk (then click on 'AGM calendar'). Shareholders who are unable to attend the AGM in person are encouraged to use their proxy votes, and attention is drawn to the changes to the proxy voting regime following the introduction of the Companies Act 2006.

8th December 2009 will mark the 125th anniversary of the founding of the Company.

Outlook

The UK stock market has been severely depressed by the extremely difficult trading conditions affecting financial markets globally. The uncertainty to business that this has caused has brought the United Kingdom into the recession which it is currently experiencing. The Board continues to work with the Investment Managers to seek improved performance, and believes that, over time, this can be achieved. However, despite the fact that, on a historic basis, valuations in the sectors in which we are engaged are becoming more attractive, it is unlikely that markets will progress until clarity and stability return to the global financial system. 

Hamish Leslie Melville 

Chairman                                        24th March 2009

Investment Managers' Report

Market Background

Last year was one of the worst ever for equity markets and indeed for all risk assets. There was an ominous fragility about the world in 2008 and in September the financial system came close to collapse. Investment banks and High Street banks failed as funds were withdrawn, cash was hoarded and they were unable to fund their operations. There was a co-ordinated global response from Central banks to the crisis and the size of the US Government's rescue packages has now risen to $2 trillion.

In the UK the run of more than 15 years of economic growth, which had been fuelled by ever increasing levels of debt, came to dramatic end; most of the UK banking system had to be rescued by the Government; the housebuilding industry practically came to a halt; UK manufacturing suffered its sharpest quarterly contraction since at least 1974 with manufacturing output falling by 5.1% and company failures rose by more than 250% in the fourth quarter; one in every 150 active companies went into liquidation in 2008; unemployment rose sharply, consumer confidence evaporated and both companies and individuals cut back their spending substantially. Despite the base rate being cut to 0.5%, its lowest level ever, the actual cost of debt remained high and its availability scarce.

That said, the stockmarket did not seize up; it was open for business and, although volatility was extraordinarily high, a logical thread remained with those companies which had very high borrowings, cyclical earnings coupled with high operational gearing, or were exposed to falling commodity prices being hit the hardest. The events of the last 18 months have followed a familiar pattern; falling asset prices prompted the banks to withdraw capital which in turn slowed economic activity and caused a further decline in asset values. By October 2008 this downward spiral had taken hold and despite seemingly sophisticated risk controls it seems that basic human behaviour does not change that much.

Performance

It was a tough year for small and mid sized UK equities and disappointingly we have not been able to outperform, with the Company's net asset value total return of -39.3% for the year ended 31st January 2009 being 3.1% behind the Company's benchmark index, the FTSE All-Share excluding FTSE 100 constituents and investment companies, which returned -36.2%. However the ten year record remains ahead of the benchmark with a net asset value return of 113.1%. This remains substantially ahead of the broader All Share index performance and we believe that, structurally, small and mid sized companies will again deliver superior outperformance over the longer term, given their broader exposure to different sectors and to new growth companies.

The total return to shareholders for the year was -39.2% as the share price discount to net asset value narrowed from 10.5% to 9.2%. The relative performance is analysed on page 6 of the Company's Annual Report & Accounts. 

This shows that the biggest contributor to underperformance was the Company's underweight stance in the Support Services sector. Support Services is the biggest sector in our benchmark index, representing about 15% of the index on average last year but we held only 10% of the portfolio in the sector, believing that these companies will not be immune from the economic downturn. The stockmarket, however, continues to believe that they will be more resilient because of their earnings visibility, long order books, framework agreements and public sector workloads. The sector outperformed during the year but we continue to remain underweight in Support Services believing that the profits to be reported by many of the companies will disappoint. Real Estate was the Company's next worst sector as the difficulty in financing new projects weighed particularly heavily on developers such as Real Estate Opportunities. The underperformance from Non-Life Insurers reflected an underweight position in Catlin and an early disposal of Amlin as it moved towards FTSE 100 promotion. This was offset by a positive performance from General Financials where IG Group contributed particularly strongly. The Oil and Gas Producers sector contributed strongly, particularly benefiting from the cash bid for Imperial Energy, but was offset by underperformance in the Oil Equipment and Services sector where we did not hold Expro, which also received a cash bid.

With market conditions so difficult throughout the year, the portfolio held a net cash position. This helped relative performance and we also bought a small position in a put option on the FTSE 100 index enabling us to take a profit of £1 million when the stockmarket fell substantially in the second half of the year.

Activity

Gearing was managed actively throughout the year. Having started the year with more than 5% net cash on deposit in order to preserve value in a falling market. This was increased to 10% cash by March as the outlook worsened. From September onwards, as the stockmarket fell substantially, cash was reinvested in the stockmarket and we ended the year with gearing of 102.8%. The investment managers have the flexibility to operate within a gearing range of 90% - 120% invested and a more specific tactical range is agreed regularly with the Board.

On 1st October 2008 Standard and Poor's reviewed the Company's credit rating and it remained unchanged at AA with a stable outlook reflecting the well-diversified portfolio and the expectation that Mercantile will continue to follow a conservative strategy.

The portfolio retains its style of broad diversification across all sectors, holding about 130 stocks of which 70 are mid sized and 60 are smaller companies. By value, around 80% of the portfolio is invested in mid sized stocks. The holding of companies larger than £1.5 bn market capitalisation is larger than the benchmark index weighting. This reflects an overweight holding in those successful larger mid sized companies which are progressing towards the FTSE 100 index. The portfolio is also overweight in the very smallest companies. These are currently offering outstanding value and good growth opportunities.

In the second half of the year we positioned the portfolio, within our diversified approach, to take advantage of falling interest rates by buying housebuilders, general financials, leisure and media stocks. We felt that the reduction in demand for commodities as global economies slowed would result in a fall in inflation which would, in turn, allow Central banks to reduce interest rates; the oil price has fallen from a peak of $147 a barrel to about $44 now and base rates in the UK have been reduced to 1.0%, their lowest ever. Although in practice the cost of debt remains relatively high and securing new borrowing facilities is difficult, those who do not have to renew their borrowings and who are not breaking their banking covenants will find the cost of borrowing reducing.

Our ten largest holdings reflect this positioning. Of the ten largest holdings as at 31st January 2009 (which are shown on page 12 of the Annual Report & Accounts) only four were in the top ten last year: IG Group, United Business Media, Ladbrokes and Investec. The new additions are two housebuilders, Bellway and Persimmon; a leisure company, William Hill; a media company, ITV; an oil and gas producer, Venture Production and a support services supplier, Babcock International.

During the year we met or visited about 250 companies and this remains a key component in our process of evaluating companies. We believe that properly targeted company meetings can help us analyse smaller companies that are often overlooked by the mainstream, evaluate management and resolve issues. Our fundamental analysis of companies is aided by JPMorgan's in-house proprietary screening process which helps us to identify companies that exhibit the best value and growth characteristics. 

Takeover activity was relatively low last year and in the coming year we expect corporate activity to centre on recapitalisation, debt for equity swaps and rescue rights issues rather than corporate acquisitions, management buyouts, private equity takeovers and initial public offerings.

Outlook

These are dramatic times and they are unlike any which have been experienced in recent history. It is clear that there is a collective global determination to maintain a supply of credit and to ensure the capital strength of the banks to avert the risk of a prolonged slump. Confidence, however, remains low and fragile and will not be helped by deteriorating news on unemployment, economic output and corporate earnings. Although still in the maelstrom, we are now working towards recovery, which will require private sector de-gearing, asset prices falling to sensible levels, the recognition of the resulting financial sector losses and recapitalisation of the financial system. No easy task. Capital preservation is thus still important. The risk of high levels of debt in individual companies is now well understood by the stockmarket but specific debt covenant risks and working capital risks are less well understood. However, the unprecedented fiscal and monetary easing which is being applied, together with the collapse in the oil price, will mean that many people will feel a benefit in 2009 and perhaps create confidence that 2010 will be a better year. We are seeking out strong companies which do have a viable future but where the stockmarket has become too negative. Substantial falls in corporate earnings of perhaps forty per cent are already being discounted by the market although analysts' profit forecasts for individual companies are still too high.

We now face the substantial risk that by printing money to reduce the value of the existing debt burden the Government could reignite fears of inflation. In that case, real assets such as property, equities and index linked gilts will offer higher returns than government bonds and cash.

Because analysts' forecasts for companies are still too high, we have omitted our usual table of forward market aggregate estimates. However, for the record, they show that the Mercantile portfolio currently stands on a 12 month forward price to earnings ratio of 7.2X and dividend yield of 5.1%. On a historic valuation basis the stockmarket is clearly cheap and long term value is present. We plan to increase gearing, by investing more of the cash available to us, either if volatility drives the stockmarket lower or if the prospects for growth improve.

Martin Hudson

Jane Lennard

Investment Managers                                    24th  March 2009

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 underperformance against the Company's benchmark index and peer companies, resulting in the Company's shares trading on a wider discount to NAV. The Board manages these risks by diversification of investments through its investment restrictions and guidelines, which are monitored and reported on by the Manager. JPMAM 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 managers, who attend all Board meetings, and reviews data which show statistical measures of the Company's risk profile. The investment managers employ the Company's gearing tactically, within a strategic range set by the Board.

• 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 JPMAM. 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 842 of the Income and Corporation Taxes Act 1988 ('Section 842'). Details of the Company's approval are given under 'Business of the Company' above. Were the Company to breach Section 842, it might lose investment trust status and, as a consequence, gains within the Company's portfolio would be subject to Capital Gains Tax. The Section 842 qualification criteria are continually monitored by JPMAM and the results reported to the Board each month. The Company must also comply with the provisions of the Companies Act 1985 and 2006 and, as its shares are listed on the London Stock Exchange, the UKLA Listing Rules. A breach of the Companies Act 1985 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 842. The Board relies on the services of its Company Secretary, JPMAM, and its professional advisers to ensure compliance with the Companies Act 1985 and 2006 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.

• Operational: Disruption to, or failure of, JPMAM's accounting, dealing or payments systems or the custodian's records could prevent accurate reporting and monitoring of the Company's financial position. Details of how the Board monitors the services provided by JPMAM and its associates and the key elements designed to provide effective internal control are included within the Internal Control section of the Corporate Governance report.

• Financial: The financial risks faced by the Company include market price risk, interest rate risk, liquidity risk and credit risk. Bank counterparties are subject to daily credit analysis by the Manager and regular consideration at meetings of the Board. In addition the Board receives regular reports on the Manager's monitoring and mitigation of credit risks on share transactions carried out by the Company. Further details are disclosed in note 22 of the Company's Report & Accounts.

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 period.

Directors' Responsibilities

The Directors each confirm to the best of their knowledge that: 

a)     the financial statements have been prepared in accordance with applicable UK accounting standards, and give a
        true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and

b)     the Annual Report, to be published shortly, 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 
        they face.

For and on behalf of the Board

Hamish Leslie Melville

Chairman

24th March 2009

Please note that up to date information on the Company, including daily NAV and share prices, factsheets and portfolio information can be found at www.mercantileit.co.uk

For further information, please contact:

Juliet Dearlove

For and on behalf of

JPMorgan Asset Management (UK) Limited - Secretary

020 7742 6000

The Mercantile Investment Trust plc

Audited figures for the year ended 31st January 2009

Income Statement  

	(Audited) Year ended 31st January 2009			(Audited) Year ended 31st January 2008
	Revenue £'000	Capital £'000	Total £'000	Revenue £'000	Capital £'000	Total £'000
Losses on investments held at fair value through profit or loss	-	(488,753)	(488,753)	-	(271,045)	(271,045)
Net foreign currency losses	-	(26)	(26)	-	(42)	(42)
Income from investments	39,601	-	39,601	43,948	-	43,948
Other interest receivable and similar income	12,149	-	12,149	7,736	-	7,736
	_______	________	_______	_______	________	_______
Gross return/(loss)	51,750	(488,779)	(437,029)	51,684	(271,087)	(219,403)
Management fee	(2,187)	(2,187)	(4,374)	(3,900)	(3,900)	(7,800)
VAT recoverable	1,130	1,069	2,199	2,921	2,922	5,843
Other administrative expenses	(2,144)	-	(2,144)	(842)	-	(842)
	_______	_______	_______	_______	_______	_______
Net return/(loss) on ordinary activities before finance costs and taxation	48,549	(489,897)	(441,348)	49,863	(272,065)	(222,202)
Finance costs	(5,502)	(5,502)	(11,004)	(5,518)	(5,518)	(11,036)
	_______	_______	_______	_______	_______	_______
Net return/(loss) on ordinary activities before taxation	43,047	(495,399)	(452,352)	44,345	(277,583)	(233,238)
Taxation	(19)	-	(19)	-	-	-
	______	_______	_______	______	_______	_______
Net return/(loss) on ordinary activities after taxation	43,028	(495,399)	(452,371)	44,345	(277,583)	(233,238)
	=====	=====	=====	=====	=====	=====
Return/(loss) per share (note 3)	41,73p	(480.45)p	(438.72)p	39.79p	(249.10)p	(209.31)p

Dividends declared in respect of the financial year ended 31st January 2009 total 36.0p per share (2008: 34.0p ordinary dividend and 4.0p special dividend per share) costing £36,898,000 (2008: £40,113,000).

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.  

The Mercantile Investment Trust plc

Audited figures for the year ended 31st  January 2009

Reconciliation of Movements in Shareholders' Funds (Audited)

	Called up share capital £'000	Share premium £,000	Capital redemption reserve £'000	Capital reserve  £'000	Revenue reserve £'000	Total £'000
At 31st January 2007	31,264	23,459	5,506	1,639,238	44,381	1,743,848
Shares bought back and cancelled	(5,189)	-	5,189	(271,068)	-	(271,068)
Net (loss)/ return from ordinary activities	-	-	-	(277,583)	44,345	(233,238)
Dividends appropriated in the year	-	-	-	-	(31,392)	(31,392)
	_______	_______	________	_______	_______	________
At 31st January 2008	26,075	23,459	10,695	1,090,587	57,334	1,208,150
Shares bought back and cancelled	(495)	-	495	(17,586)	-	(17,586)
Net (loss)/return from ordinary activities	-	-	-	(495,399)	43,028	(452,371)
Dividends appropriated in the year	-	-	-	-	(40,895)	(40,895)
	_______	_______	________	_______	_______	________
At 31st January 2009	25,580	23,459	11,190	577,602	59,467	697,298
	=====	=====	=====	=====	=====	=====

The Mercantile Investment Trust plc

Audited figures for the year ended 31st  January 2009

Balance sheet

	(Audited) Year ended 31st January 2009	(Audited) Year ended 31st January 2008
	£'000	£'000
Fixed assets
Investments at fair value through profit or loss	716,891	1,145,680
Current assets
Debtors	1,786	7,798
Cash and short term deposits	171,392	287,985
	_______	_______
	173,178	295,783
Creditors: amounts falling due within one year	(15,966)	(56,604)
	_______	_______
Net current assets	157,212	239,179
	_______	_______
Total assets less current liabilities	874,103	1,384,859
Creditors: amounts falling due after more than one year	(176,805)	(176,709)
	_______	_______
Total net assets	697,298	1,208,150
	=====	=====
Capital and reserves
Called up share capital	25,580	26,075
Share premium	23,459	23,459
Capital redemption reserve	11,190	10,695
Capital reserve	577,602	1,090,587
Revenue reserve	59,467	57,334
	_______	_______
Shareholders' funds	697,298	1,208,150
	=====	=====
Net asset value per share (note 4)	681.5p	1,158.3p

The Mercantile Investment Trust plc

Audited figures for the year ended 31st  January 2009

Cash flow statement

	(Audited)	(Audited)
	31st January	31st January
	2009	2008
	£'000	£'000
Net cash inflow from operating activities	54,483	45,371
Servicing of finance
Interest paid	(10,898)	(10,927)
	_______	_______
Net cash outflow from servicing of finance	(10,898)	(10,927)
Taxation
Overseas tax recovered	16	-
Financial investment
Purchases of investments	(1,320,325)	(1,079,216)
Sales of investments	1,217,694	1,509,476
Settlement of option contracts	975	-
Other capital charges	(31)	(61)
	_______	_______
Net cash (ourflow)/inflow from financial investment	(101,687)	430,199
Total dividends paid	(40,895)	(31,392)
	_______	_______
Net cash (outflow)/inflow before financing	(98,981)	433,251
Financing
Repurchase of ordinary shares	(17,586)	(274,953)
	_______	_______
Net cash outflow from financing	(17,586)	(274,953)
	_______	_______
(Decrease)/increase in cash in the year	(116,567)	158,298
	=====	=====

Notes to the Accounts

1. Accounting policies 

   The accounts have been prepared in accordance with the Companies Act 1985, United Kingdom Generally Accepted Accounting Practice ('UK GAAP')  
   and with the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies' (the 'SORP') issued by the Association of
   Investment Companies ('AIC') in January 2009. All of the Company's operations are of a continuing nature.

   2. Dividends paid and declared

	(Audited)	(Audited)
	Year ended	Year ended
	31st January 2009	31st January 2008
	£'000	£'000
Unclaimed dividends refunded to the Company1	(10)	(38)
2008 fourth quarterly dividend of 17.5p (2007: 11.5p) paid to shareholders in May	18,253	13,742
2008 special dividend of 4.0p (2007: nil) paid to shareholders in May	4,172	-
First quarterly dividend of 6.0p (2008: 5.5p) paid to shareholders in August	6,186	6,039
Second quarterly dividend of 6.0p (2008: 5.5p) paid to shareholders in November	6,147	5,881
Third quarterly dividend of 6.0p (2008: 5.5p) paid to shareholder in February	6,147	5,768
	_______	_______
Total dividends paid in the year	40,895	31,392
	======	======
Fourth quarterly dividend of 18.0p (2008: 17.50p) paid to shareholders in May	18,418	18,253
Special dividend of nil (2008: 4.0p) paid to shareholders in May	-	4,172
	_______	_______
	18,418	22,425
	======	=====

1 Represents dividends which remain unclaimed after a period of 12 years and thereby become the property of the Company.

The fourth quarterly have been declared in respect of the year ended 31st January 2009. In accordance with the accounting policy of the Company, this dividend will be reflected in the accounts for the year ending 31st January 2010.

3. Return/(loss) per share	(Audited)	(Audited)
	Year ended	Year ended
	31st January 2009	31st January 2008
	£'000	£'000
Return/(loss) per share is based on the following: Revenue return	43,028	44,345
Capital loss	(495,399)	(277,583)
	_______	_______
Total loss	(452,371)	(233,238)
	======	======
Weighted average number of shares in issue	103,110,703	111,433,402
Revenue return per share	41.73p	39.79p
Capital loss per share	(480.45)p	(249.10)p
	_______	_______
Total loss per share	(438.72)p	(209.31)p
	======	=====

4. Net asset value per share

The Net asset value per share is based on the net assets attributable to the ordinary shareholders of £697,298,000 (2008: £1,208,150,000) and on the 102,321,968 (2008: 104,303,166) shares in issue at the year end.

5. Status of preliminary announcement

The financial information set out in this preliminary announcement does not constitute the Company's statutory accounts for the years ended 31st January 2008 or 2009. The statutory accounts for the year ended 31st January 2009 have not been delivered to the Registrar of Companies, nor have the auditors yet reported on them. The statutory accounts for the year ended 31st January 2009 will be finalised on the basis of the information presented by the directors in this preliminary announcement and will be delivered to the Registrar of Companies following the approval of the accounts by the Board of Directors. 

JPMORGAN ASSET MANAGEMENT (UK) LIMITED

 

END

 

 

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