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JP Morgan Flem Inc (JPI)

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Friday 30 April, 2004

JP Morgan Flem Inc

Final Results

JP Morgan Flem Income & Capital Inv
30 April 2004


                        STOCK EXCHANGE ANNOUNCEMENT

30th April 2004

The Board today announces the preliminary results of the Company for the year
ended 29th

February 2004.

Chairman's Statement

Portfolio Performance

After a difficult period, UK equities staged a recovery during 2003 as
investors' confidence in the markets returned following the war in Iraq.

It is pleasing to report that the total return on shareholders' funds between
1st March 2003 and 29th February 2004 was +34.4%. This compares favourably with
the total return of 22.1% from the Company's composite benchmark, which
comprises 67.5% FTSE 350 Index (excluding Investment Trusts) and 32.5% Merrill
Lynch 5-10 year Sterling Corporate Bond Index.

The UK equity part of the portfolio performed well as a consequence of the
portfolio's asset allocation, and the Investment Manager's focussed
stock-picking approach, returning +41.5%, compared with +30.9% from its
benchmark. The Company's bond portfolio returned +5.0% which was approximately
in line with its benchmark, which returned +5.1%. The Company's gearing was also
a positive contributor, adding 4.9% to the return on the whole portfolio.

In contrast to 2002, when the Company benefited by being underweight in equities
relative to its benchmark, the continued rebalancing of the portfolio towards
equities in 2003 enhanced performance as equity markets rallied and produced
returns well in excess of bonds. At the year end, the Company's portfolio was
invested 75% in UK equities and 25% in corporate bonds.

Return on Packaged Units

The total return on the packaged units, with net dividends reinvested, was
+39.9% during the year. This differs from the return on shareholders' funds
because the units derive a greater proportion of their performance from the
ordinary shares and have therefore been more affected by the positive impact of

The Investment Trust Market

The Financial Services Authority's investigation into allegations of mis-selling
within the investment trust industry, following the well publicised difficulties
of a small number of highly geared split capital trusts, is still in progress. I
would stress that neither this Company nor JPMorgan Fleming Asset Management
have been involved in the FSA investigation. Your Board supports the move
towards greater disclosure by split capital trusts generally and the Company has
complied with all requests to improve transparency. Happily, the share prices of
the more stable split capital trusts have continued to recover and, during the
year under review, the Company's ordinary share price rose by 80.3%, from 38.0p
to 68.5p. The Company's zero dividend preference share price also rebounded, if
less dramatically, from 94.0p to 119.8p, a rise of 27.4%. The price of the
packaged unit rose by 48.0%, from 171.0p to 253.0p.


The Board shares the Investment Manager's cautious optimism regarding the
outlook for the UK equity market. Given the portfolio's asset allocation, and
the Investment Manager's focussed stock selection, the Board believes that the
Company is well positioned to benefit from any further rise in the market. The
outlook for bonds is less positive because of the likely increase in interest

Loan Facility

On 21st January 2004 the Company repaid the £6.6 million floating rate portion
of its £33 million loan from The Royal Bank of Scotland plc, raising the
necessary funds by a reduction in the bond portfolio, and so shifting the
balance of the whole portfolio in favour of equities. This action was taken
because of the Board's concern that rising interest rates would raise the cost
of borrowing, and the Investment Manager's belief that the spreads on the
Company's corporate bond holdings had narrowed as far as was possible in the
current market conditions.

Revenue and Dividends

Revenue after taxation for the year was £6,315,000 and earnings per ordinary
share were 8.46p.

A fourth interim dividend of 2.00p per ordinary share was paid on 1st April
2004, to ordinary shareholders and unitholders on the register as at the close
of business on 27th February 2004. That dividend, when added to the three
interim dividends of 1.75p per ordinary share previously paid by the Company,
gives a total payment for the year to 29th February 2004 of 7.25p per ordinary

Share Repurchase Facility

At last year's Annual General Meeting, shareholders granted the Directors
authority to repurchase the Company's shares for cancellation, such authority to
expire at the earlier of 21st November 2004 or the conclusion of the Annual
General Meeting of the Company in 2004. During the year, 490,000 zero dividend
preference shares were repurchased at a cost of approximately £464,000, reducing
the issued share capital for this class by 0.75%. These repurchases had the
effect of increasing the net asset value of the ordinary shares by 0.11p.

The Board will continue to use this authority as and when appropriate and is
seeking approval from shareholders to renew it at the forthcoming Annual General

Board of Directors

I reported in my interim statement that Roderick Collins had been appointed a
Director of the Company on 1st June 2003. With his extensive business and
investment management experience, he has proved a valuable addition to the Board
deliberations. I therefore strongly recommend shareholders to vote in favour of
his election at the forthcoming Annual General Meeting, as well as the
re-election of Sir Laurence Magnus and James Roe.

Annual General Meeting

The Annual General Meeting will be held at 60 Victoria Embankment, London, EC4Y
0JP at 2.30pm on Monday 7th June 2004. The format of the meeting will be similar
to that of last year, and will include a presentation from the Investment
Manager on investment policy and performance. There will also be the usual
opportunity for shareholders to meet the Board and representatives of JPMorgan
Fleming after the meeting.

If you wish to raise any detailed or technical questions at the Meeting, it
would be helpful if you could mention them in advance to the Company Secretary
at Finsbury Dials, 20 Finsbury Street, London EC2Y 9AQ. Shareholders who are
unable to attend the Meeting in person are encouraged to use their proxy votes.

Sir Charles Nunneley


JPMorgan Fleming Income & Capital Investment Trust plc

Unaudited figures for the year ended 29th February 2004


                                                         For the year ended    Period from 1st February 2002
                                                                                   to 28th February 2003
                                                         29th February 2004
                                                      Revenue    Capital     Total Revenue     Capital     Total

                                                        £'000      £'000     £'000     £'000     £'000     £'000

Realised gains/(losses) on investments                      -      8,980     8,980         -  (10,772)  (10,772)
Net unrealised gains/(losses) on investments                -     21,317    21,317         -  (17,054)  (17,054)
Net gains/(losses) on foreign currency cash and
short term deposits held during the period
                                                            -        473       473         -      (14)      (14)
Unrealised loss on currency hedge                           -       (13)      (13)         -         -         -
Other capital charges                                                (4)       (4)         -         -         -
Franked dividends                                       4,737          -     4,737     3,925         -     3,925
Unfranked interest                                      2,046          -     2,046     3,060         -     3,060
Overseas dividends                                        871          -       871       733         -       733
Scrip dividends                                            31          -        31         -         -         -
Option income                                             794          -       794       381         -       381
Underwriting commissions                                   11          -        11         2         -         2
Deposit interest                                           71          -        71       156         -       156
                                                      _______   ________   _______   _______   _______   _______

Gross return / (loss)                                   8,561     30,753    39,314     8,257  (27,840)  (19,583)

Management fee                                          (543)      (813)   (1,356)     (495)     (741)   (1,236)

Other administrative expenses                           (391)          -     (391)     (343)         -     (343)

Interest Payable                                        (575)    (1,340)   (1,915)     (573)   (1,338)   (1,911)

                                                      _______    _______   _______   _______   _______   _______

Return/(loss) before taxation                           7,052     28,600    35,652     6,846  (29,919)  (23,073)

Taxation                                                (737)        676      (61)     (877)       624     (253)

                                                       ______    _______   _______   _______   _______   _______

Return/(loss) after taxation                            6,315     29,276    35,591     5,969  (29,295)  (23,326)

Capital return attributable to zero dividend                -    (5,553)   (5,553)         -   (4,906)   (4,906)
preference shareholders

Dividend on ordinary shares                           (5,414)          -   (5,414)   (5,151)         -   (5,151)

                                                       ______    _______   _______   _______   _______   _______

Transfer to/(from) reserves                               901     23,723    24,624       818  (34,201)  (33,383)

Return per ordinary share                               8.46p     31.77p    40.23p     8.00p  (45.80)p  (37.80)p

JP Morgan Fleming Income & Capital Investment Trust plc

Unaudited figures for the year ended 29th February 2004

BALANCE SHEET                                                       At 29th February      At 28th February
                                                                                2004                  2003
                                                                               £'000                 £'000

Investments at valuation                                                     165,988               140,770

Net current (liabilities)/assets                                               (668)                 1,437

Creditors: amounts falling due after more than one year                     (26,400)              (33,000)
                                                                              ______                ______

Total net assets                                                             138,920               109,207
                                                                               =====                 =====
Net asset value per ordinary share                                             88.0p                 55.0p
Net asset value per zero dividend preference share                            112.4p                103.9p

CASH FLOW STATEMENT                                                             2004                  2003
                                                                               £'000                 £'000

Net cash inflow from operating activities                                      6,989                 4,900

Net cash outflow from servicing of finance                                   (2,000)               (1,462)

Total taxation paid                                                            (134)                     -

Net cash inflow/(outflow) from capital expenditure and                         6,414              (37,380)
financial investment

Total equity dividends paid                                                  (5,265)               (3,807)

Net cash (outflow)/inflow from financing                                     (7,064)                39,744
                                                                             _______               _______
(Decrease)/Increase in cash for the period                                   (1,060)                 1,995
                                                                               =====                 =====

The above financial information does not constitute statutory accounts as
defined in Section 240 of the Companies Act 1985.The comparative financial
information is based on the statutory accounts for the period ended 28th
February 2003. These accounts, upon which the auditors issued an unqualified
opinion, have been delivered to the Registrar of Companies.


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            The company news service from the London Stock Exchange