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JP Morgan Flem Inc (JPI)

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Monday 25 October, 2004

JP Morgan Flem Inc

Interim Results

JP Morgan Flem Income & Capital Inv
25 October 2004

               JPMORGAN FLEMING INCOME & CAPITAL INVESTMENT TRUST PLC

                         STOCK EXCHANGE ANNOUNCEMENT OF
                   UNAUDITED RESULTS FOR THE SIX MONTHS ENDED
                                31st AUGUST2004

The Board today release the unaudited interim results of the Company for the six
months ended 31st August 2004.

The following are comments from the Chairman:


Performance

Overall, the performance of the UK equity and bond markets was muted during the
six months to 31st August 2004. The Company's composite benchmark index of 67.5%
FTSE 350 Index (excluding investment trusts) and 32.5% Merrill Lynch 5-10 year
Sterling Corporate Index rose by just 1.4% in total return terms.

Within our portfolio, both UK equities and corporate bonds produced positive
returns (1.6% and 2.0% respectively) and outperformed their respective
benchmarks by a modest amount, but the total return on shareholders' funds was a
negative figure of 0.4% due to interest costs and expenses.

Loan Facility

I reported in the last Annual Report that in January 2004 the Company repaid a
£6.6 million portion of its £33 million loan from the Royal Bank of Scotland
plc. On 18th June 2004 the remaining £26.4 million of this loan was repaid to
leave the Company with no outstanding borrowing.

The Board believes that, given current market conditions, the repayment is a
prudent measure which improves the risk and reward characteristics of the
Company's ordinary income shares and zero dividend preference shares. However,
the Board will consider re-introducing borrowing in the future if investment
conditions seem appropriate.

Future Returns

As I have said, returns have been modest over the last six months compared with
those seen in the twelve months to February 2004. Your Board believes it is
appropriate to remind ordinary shareholders of the risks involved in investing
in ordinary shares in a split-capital investment trust when stockmarkets are
flat or falling. The returns to ordinary shareholders are influenced by the
prior charge attributable to the zero dividend preference ('ZDP') share capital.
Value accrues to the ZDP's at an annual rate of 7.5% and the Company's total
assets have to increase by more than the cost of the ZDP accrual in order to
deliver a positive capital return to ordinary shareholders. An indicator called
the hurdle rate measures the amount by which the total assets of the Company
have to grow each year in order to return the current share price to ordinary
shareholders when the Company winds up in February 2008. At the time of writing
the hurdle rate to return the current share price of 67p in 2008 is 3.9% per
annum. Should the Company fail to achieve the required hurdle rate over its
remaining life, ordinary shareholders would receive less than the current share
price, although they would have continued to receive all the distributed income
in the meantime.

The annual rate of growth in assets required to return 100p per share to
ordinary shareholders in 2008 is currently 8.8%, a challenging target. However,
the current yield on the ordinary shares of 11.9% exceeds the average yield on
other investment trusts by a wide margin.

The hurdle rate is published regularly by many stockbrokers who follow the
investment trust sector and it will be shown in all future interim and annual
reports.

Dividends

During the six months under review the Board has declared two quarterly interim
dividends for the financial year, each of 1.75p per ordinary share, paid to
ordinary shareholders and unitholders on 1st July 2004 and 1st October 2004.

It is the Board's intention, in the absence of unforeseen circumstances, at
least to maintain the current level of quarterly dividend payments for the
remainder of the financial year.

Share repurchases

At the Annual General Meeting in June 2004, shareholders renewed the Board's
authority to repurchase up to 14.99% of the Company's issued share capital. At
the time of writing, no shares have been repurchased under this authority, but
the Board will continue to watch for suitable opportunities.



Sir Charles Nunneley

Chairman            25th October 2004



Please note that the above statements may differ from the final version to be
published in the interim accounts.

For further information, please contact:

Lucy Sullivan, for and on behalf of
J.P. Morgan Fleming Asset Management (UK) Limited, 020 7742 6000
Secretary to the Company




JPMorgan Fleming Income and Capital Investment Trust plc
Unaudited figures for the  six months ended 31 August 2004

Statement of Total Return (Unaudited)
                           Six months to 31 August 2004   Six months to 31 August 2003       Year to 29 February 2004
                           Revenue    Capital     Total   Revenue   Capital      Total    Revenue    Capital      Total
                             £'000      £'000     £'000     £'000     £'000      £'000      £'000      £'000      £'000

Realised (losses)/gains
on investments                   -    (1,246)   (1,246)         -     4,201      4,201          -      8,980      8,980
Net unrealised (losses)/
gains on investments             -    (1,338)   (1,338)         -    16,187     16,187          -     21,317     21,317
Realised currency gains
on cash and short term
deposits held during the
period                           -          -         -         -         1          1          -        473        473
Unrealised losses on
foreign currency hedge           -      (46)       (46)         -    (20)         (20)          -       (13)       (13)
Other capital charges            -        (1)       (1)         -       (2)        (2)          -        (4)        (4)
UK dividend income           3,329          -     3,329     3,219         -      3,219      4,737          -      4,737
Unfranked dividend             137          -       137       527         -        527        871          -        871
income
Unfranked interest           1,060          -     1,060     1,018         -      1,018      2,046          -      2,046
income
Scrip dividends                  -          -         -        31         -         31         31          -         31
Underwriting commission          -          -         -         -         -          -         11          -         11
Deposit interest                50          -        50        49         -         49         71          -         71
Option income premiums         223          -       223       480         -        480        794          -        794
                           _______   ________   _______   _______  ________    _______    _______    _______    _______

Gross return/(loss)          4,799    (2,631)     2,168     5,324    20,367     25,691      8,561     30,753     39,314
Management fee               (280)      (420)     (700)     (258)     (387)      (645)      (543)      (813)    (1,356)
Other administrative
expenses                     (150)          -     (150)     (166)         -      (166)      (391)          -      (391)

Interest payable             (149)      (347)     (496)     (286)     (667)      (953)      (575)    (1,340)    (1,915)
Breakage cost on
interest rate swap               -      (120)     (120)         -         -          -          -          -          -
                           _______    _______   _______   _______   _______    _______    _______    _______    _______

Return/(loss) before         4,220    (3,518)       702     4,614    19,313     23,927      7,052     28,600   35,652
taxation
Taxation                     (201)        177      (24)     (416)       348       (68)      (737)        676       (61)
                            ______    _______   _______    ______   _______    _______    _______    _______    _______

Return/(loss) after          4,019    (3,341)       678     4,198    19,661     23,859      6,315     29,276     35,591
taxation

Return attributable to
zero dividend preference
shares                           -    (2,945)   (2,945)         -   (2,722)    (2,722)          -    (5,553)    (5,553)

Dividends on ordinary      (2,614)          -   (2,614)   (2,614)         -    (2,614)    (5,414)          -    (5,414)
shares

                            ______    _______   _______    ______   _______    _______    _______    _______    _______

Transfer to/(from)           1,405    (6,286)   (4,881)     1,584    16,939     18,523        901     23,723   24,624
reserves

Return/(loss) per
ordinary share               5.38p    (8.42)p   (3.04)p     5.62p    22.68p     28.30p      8.46p     31.77p     40.23p
Dividend per ordinary        3.50p          -     3.50p     3.50p         -      3.50p      7.25p          -      7.25p
share


JPMorgan Fleming Income and Capital Investment Trust plc
Unaudited figures for the six months ended 31 August 2004

BALANCE SHEET                                                          31 August       31 August     29 February
                                                                            2004            2003            2004
                                                                           £'000           £'000           £'000

Total portfolio                                                          133,062         161,680         165,988

Net current assets / (liabilities)                                         3,922           1,308           (668)

Long term loans                                                                -        (33,000)        (26,400)
                                                                         _______         _______         _______
Total net assets                                                         136,984         129,988         138,920

                                                                           =====           =====           =====
Net asset value per zero dividend preference share                        116.9p          108.1p          112.4p
Net asset value per ordinary share                                         81.5p           79.9p           88.0p

CASH FLOW STATEMENT                                                    31 August       31 August     29 February
                                                                            2004            2003            2004
                                                                           £'000           £'000           £'000

Net cash inflow from operating activities                                  3,418           4,127           6,989

Net cash outflow from servicing of finance                                 (980)           (980)         (2,000)

Net cash inflow/(outflow) for taxation                                        34           (108)           (134)

Net cash inflow from capital expenditure and financial
investment                                                                28,826             143           6,414
                                                                          
Total equity dividends paid                                              (2,800)         (2,651)         (5,265)

Net cash outflow from financing                                         (26,400)           (461)         (7,064)
                                                                         _______         _______         _______
Increase/(decrease) in cash for the period                                 2,098              70         (1,060)

                                                                           =====           =====           =====



The above financial information does not constitute statutory accounts as
defined in Section 240 of the Companies Act 1985. Statutory accounts for the
period ended 29 February 2004 have been delivered to the Registrar of Companies.


J.P. MORGAN FLEMING ASSET MANAGEMENT (UK) LIMITED

25th October 2004


                      This information is provided by RNS
            The company news service from the London Stock Exchange