Half-year Financial Report
Summary by AI BETAClose X
LONDON STOCK EXCHANGE ANNOUNCEMENT
JPMORGAN JAPANESE INVESTMENT TRUST PLC
Half Year Report and Financial Statements
for the six months ended 31st March 2026
Legal Entity Identifier: 549300JZW3TSSO464R15
Information disclosed in accordance with the DTR 4.1.3
Highlights
• For the six months ended 31st March 2026 the NAV total return* of +2.0% compared with +6.7% for the TOPIX Index (in sterling terms), (the 'Benchmark'). Share price return of +3.8%.
• For the year ended 31st March 2026, NAV total return* of +24.5% compared with +23.4% for the Benchmark. Share price return of +26.7%.
• For the three year annualised period ended 31st March 2026, NAV total return* of +16.4% compared with +13.3% for the Benchmark. Share price return of +16.0%.
• For the ten year annualised period ended 31st March 2026, NAV total return* of +10.2% compared with +9.3% for the Benchmark. Share price return of +11.0%.
• Over the six-month period to 31st March 2026, the Company repurchased 4.5 million shares at a cost of £33.2 million and an average discount of 8.8%.
*With debt at fair value
Stephen Cohen, Chairman, commented:
"The case for investing in Japan is stronger than ever. The market's ascent to historic record highs during the period…demonstrates that ongoing corporate reforms are delivering tangible results. These structural improvements ensure the market remains attractive for long-term growth portfolios. The Board shares the Portfolio Managers' view that these reforms are still gathering momentum and will continue to lift shareholder returns, and support the market, for the foreseeable future."
Nicholas Weindling, Miyako Urabe and Xuming Tao, Portfolio Managers, commented:
"Japan is in the midst of a number of transformative developments. Of most significance are government initiatives to encourage corporate governance reforms, which have been boosting shareholder returns and supporting the market in recent years. Our highly experienced Tokyo-based investment analysts are exceptionally well-placed to identify and capture the myriad opportunities generated by the changes afoot in Japan."
CHAIRMAN'S STATEMENT
The Japanese equity market delivered a remarkable performance during the six months leading up to 31st March 2026, even with the late-period volatility caused by the conflict in Iran. Gains were underpinned by the persistent drive for corporate governance reforms and increased mergers and acquisitions activity, which are transforming Japan's corporate landscape, lifting shareholder returns and attracting increasing foreign interest in Japanese equities. Investors also welcomed Prime Minister Takaichi's historic victory in a snap election held in February. The Company's benchmark, the TOPIX Index (in sterling terms), rose by 6.7% over the period.
In the volatile market environment of the last six months, where 'value' stocks yet again outperformed 'growth' stocks, the Company's net asset value ('NAV') total return (with debt at fair value) was only +2.0% in sterling terms, an underperformance of 4.7 percentage points. In contrast to this short-term outcome, longer-term annualised returns remain encouraging. Over the three years ended 31st March 2026 the Company returned +16.4%, versus the benchmark return of +13.3%; and over the ten-year period, the Company outperformed, returning +10.2% versus +9.3% for the benchmark.
The Investment Manager's Report on pages 11 to 15 of the Half Year Report and Financial statements discusses recent performance and the investment rationale behind recent portfolio activity. It also discusses the outlook for Japanese equities, including the implications of the geopolitical headwinds from the conflict in the Middle East.
Gearing
The Board is fully committed to strategic gearing, viewing it as a fundamental mechanism to enhance the Trust's NAV and deliver superior long-term shareholder value. By reviewing leverage at each Board meeting, the Board ensures the portfolio is optimally positioned to amplify investment returns and exploit high-conviction growth opportunities. The Portfolio Managers then manage gearing within the agreed limits of 5% net cash and 20% geared in normal market conditions. As at 31st March 2026, gearing stood at 15.3%, up from 13.5% at the start of the period - a level that reflects the Portfolio Managers' confidence in the outlook for the Japanese market.
The Board considers it prudent that the Company's gearing capacity is funded from a mix of funding sources. In addition to the Company's low-cost, long-term fixed rate borrowings, which benefit from a very competitive average coupon rate of 1.1%, the Company uses Contracts for Difference ('CFDs'). These derivative instruments are a flexible, low-cost and capital-efficient alternative to loan facilities which provide economic exposure to share price movements without owning the underlying shares, thereby providing geared exposure. The Board closely monitors the use of CFDs and their cost-effectiveness as part of its ongoing oversight of gearing.
Discount Management and Share Repurchases
The Board keeps the Company's share price discount to NAV under close review. We recognise that a competitive discount with low volatility is very important for maintaining investor confidence and ensuring the attractiveness of the Company's shares. We are committed to maintaining a competitive discount relative to our peers. By actively managing discount volatility, through our buyback activity, we aim to provide greater certainty for our existing shareholders while enhancing our appeal to new investors.
Over the six months to 31st March 2026, the Company repurchased 4,527,000 shares at an average discount of 8.8%, at a total cost of £33.2 million. The share price discount to NAV (with debt at fair value) ranged between -12.5% and -4.0% (average -8.4%), ending the period at 9.0%, compared with 10.5% at 30th September 2025.
Since 31st March 2026, the Company has repurchased a further 2,415,000 shares at an average discount of 8.3%, at a cost of £18.5 million. Shares are only repurchased when they stand at a discount to prevailing NAV, which is NAV-accretive for continuing shareholders. Repurchased shares may either be cancelled or held in treasury for potential reissue at a premium to NAV.
Revenue and Dividends
The Company's investment objective is to seek capital growth from a portfolio of investment in Japanese companies. Our Portfolio Managers are thus unconstrained by the requirement to achieve a certain level of income, and this allows them to select the 'best' stocks, rather than those that fit a specific income requirement.
In line with the Board's established practice the majority of revenue available each year is paid as a final dividend rather than as an interim dividend. For the year ended 30th September 2025, the Company paid a dividend of 8.70p per share (2024: 6.75p) on 12th February 2026. This reflects the fact that Japanese companies' dividend payouts and payout ratios have increased meaningfully in recent years, thanks to improved corporate governance, stronger balance sheets, and the growing focus on shareholder returns. The Board hopes to be able to continue its unbroken streak of annual dividend growth since 2020.
The Board
As outlined in the Company's 2025 Annual Report, in line with the Company's commitment to good governance and effective Board succession, I will remain as Chair until the conclusion of the Annual General Meeting (AGM) in January 2027, at which point I will step down. Following a thorough succession planning process, the Board intends to appoint Sally Duckworth, currently Chair of the Audit & Risk Committee, as Board Chair on my departure. Sally brings extensive experience in investment management, governance and Board leadership. It is intended that Thomas Walker will assume the role of Chair of the Audit & Risk Committee at that time.
Also, as previously announced and in line with the Company's Board succession plan, at the beginning of this six month reporting period the Board was pleased to welcome Takashi Maruyama as a Director and at the Company's 2026 AGM, George Olcott retired from the Board. Anna Dingley took up the role of Chair of the Remuneration Committee following George's retirement.
After my departure, the Board will comprise six Directors. The Board keeps its optimal size under regular review, seeking to balance efficiency with the necessary breadth of expertise; it anticipates that the number of Directors will typically fluctuate between four and six as part of its long-term succession strategy. The Board also reaffirms its ongoing commitment to diversity and independence, in line with regulatory requirements and best practice.
Stay Informed
The Company provides email updates featuring regular news and commentary, together with the latest performance information. If you have not already subscribed and would like to receive these communications, you can register via https://web.gim.jpmorgan.com/emea_investment_trust_subscription/welcome?targetFund=JFJ or by scanning the QR code on page 9 of the Half Year Report and Financial Statements
Outlook
The case for investing in Japan is stronger than ever. The market's ascent to historic record highs during the period, with the Nikkei 225 exceeding 58,000 for the first time in February 2026, demonstrates that ongoing corporate reforms are delivering tangible results. These structural improvements ensure the market remains attractive for long-term growth portfolios. The Board shares the Portfolio Managers' view that these reforms are still gathering momentum and will continue to lift shareholder returns, and support the market, for the foreseeable future.
Beyond governance, Japan is benefiting from a powerful convergence of structural tailwinds. The rapid adoption of AI and a strategic surge in defence spending are driving industrial innovation. Coupled with the Bank of Japan's successful move towards monetary normalisation and the first significant rise in real wages in decades, these factors continue to encourage foreign investment.
The Board is confident that the Company remains well positioned to maintain its record of long-term capital growth and investment outperformance.
On behalf of the Board, I would like to thank shareholders for their continued support.
Stephen Cohen
Chairman 29th May 2026
INVESTMENT MANAGERS' REPORT
Economic and market backdrop
The Japanese market rallied to all-time highs in February 2026 after new Prime Minister Sanae Takaichi led the Liberal Democratic Party to a historic landslide victory in Lower House elections, securing a super-majority of over two-thirds of seats. This was the most decisive result for a single party in Japan's post-war history and guarantees a period of political stability that will allow Takaichi to focus on delivering her agenda of growth and national security.
The period from October 2025 to February 2026 represents a historic bull run for the Japanese equity market, marked by the Nikkei 225 decisively breaching the 50,000-point milestone late in 2025. This surge was initially fuelled by a convergence of structural factors: the surprise election, the continued success of Tokyo Stock Exchange (TSE) governance reforms that forced companies to prioritise shareholder value through record buybacks and the Bank of Japan's decision to normalise policy by hiking rates to 0.75%.
Sadly, these gains proved short-lived, as the 'Great Japanese Re-rating' collided with outbreak of conflict in the Middle East. March was the worst month for the Japanese market since October 2008. Japan is highly dependent on imported energy. Around half of its crude oil is imported from the Middle East, so the closure of the Strait of Hormuz had even greater implications for Japan than for other developed economies. Gasoline subsidies were introduced to mitigate the impact on consumers and the Japanese Yen (Yen) dropped below the Yen160/USD level for the first time since mid-2024. This Yen depreciation came despite short-term interest rates continuing to rise slowly.
The other key news at the end of the period was the announcement of the results of the Shunto Spring wage negotiations. After decades of wage stagnation, wages will increase by over 5% for the third successive year this year, boosting domestic consumption. This confirmed that Japan is now a 'normal' growing economy, which is attractive for foreign investors.
The Japanese market delivered exceptional performance for the majority of the period, with the TOPIX surging by over 27% in the first five months. While the outbreak of conflict in the Gulf triggered a broad global retreat in March, with the TOPIX dropping by roughly 11% in line with major European and Asian benchmarks, it still ended the six-month period up 6.7%. This resilience, even in the face of significant external shocks, underscores the newfound stability and long-term appeal of the Japanese equity market.
Performance in Sterling Terms
Your Company made a modest return of +2.0% in net asset value terms (with debt at fair value), over the review period, lagging its benchmark return of +6.7%. The portfolio returned +24.5% over the 12-month period, outperforming the benchmark return of +23.4%. Longer-term performance remains strong in absolute and relative terms. The cumulative NAV total return (with debt at fair value) over the three-year period to end March 2026 was +57.8%, compared to a benchmark return of +45.4% on the same basis. While NAV total returns of +22.9% over the five-year period trailed the benchmark return of +44.2%, over the ten-year period, the Company's cumulative NAV return was +163.2%, ahead of the equivalent benchmark return of +143.8%.
Performance attribution
Six months ended 31st March 2026
|
|
% |
% |
|
Contributions to total returns |
|
|
|
Benchmark return |
|
6.7 |
|
Stock selection |
(6.7) |
|
|
Currency |
(0.1) |
|
|
Gearing/Cash |
1.8 |
|
|
Investment Manager contribution |
|
(5.0) |
|
Portfolio returnA |
|
1.7 |
|
Management fee and other expenses |
(0.2) |
|
|
Share Buy-Back/Issuance |
0.3 |
|
|
Other effects |
|
0.1 |
|
Return on net assets - debt at par valueA |
|
1.8 |
|
Impact of fair value of debt |
|
0.2 |
|
Return on net assets - debt at fair valueA |
|
2.0 |
|
Return on share priceA |
|
3.8 |
Source: Morningstar/J.P. Morgan. All figures are on a total return basis.
Performance attribution analyses how the Company achieved its recorded performance relative to its benchmark.
A Alternative Performance Measure ('APM').
A glossary of terms and APMs is provided on pages 30 to 33 of the Half Year Report and Financial Statements.
Japan is in the midst of a number of transformative developments. Of most significance are government initiatives to encourage corporate governance reforms, which have been boosting shareholder returns and supporting the market in recent years. In addition, after years of ultra loose monetary policy, the Bank of Japan (BoJ) move towards interest rate normalisation is benefitting rate sensitive businesses particularly the banking sector. Simultaneously the Japanese Stock Exchange through its revised Nippon Individual Savings Account (NISA) scheme is encouraging households to reduce cash savings in favour of higher-yielding equities. This financial evolution is occurring alongside a surge in AI and automation which are generating growth opportunities in the tech sector. At the same time increased defence spending is now seen as an existential necessity. The historically moribund Japanese defence sector has been reinvigorated by geopolitical conflict and the Trump administration's antipathy towards the NATO alliance. This has compelled NATO members and its allies, like Japan, to boost military spending; in Japan's case to a target of nearly 2% of GDP.
These developments mean the investment environment is generally very positive, and we have made substantial changes to the portfolio over the last few years to increase exposure to these trends. However, one factor undermined the Company's relative performance in the six-month review period. The Japanese market is experiencing an ongoing style rotation, which began in 2021 and this has created a headwind for your Company. Its strategy favours Premium and Quality-rated stocks (defined in the glossary of terms and APMs provided on pages 30 to 33 of the Half Year Report and Financial Statements), rather than lower quality value stocks, as we believe that such stocks deliver the best long-term performance. Japan's value companies have significantly outperformed growth companies every year since 2021. In the six-month review period value outperformed growth by around 12 percentage points. This performance contrasts with developments in the US market, where AI-related stocks and other growth companies have been the main drivers of market returns over the past five years.
There are several reasons why value has performed so well in the Japanese market:
- Value companies have responded more enthusiastically than growth businesses to Japan's corporate governance reform efforts, restructuring their businesses and improving capital efficiency and shareholder returns;
- Interest rate rises are driving earnings growth, especially amongst financial names;
- Global growth is strong, and this is boosting the earnings of value cyclicals; and
- Persistent yen weakness is providing Japanese exporters with a significant competitive advantage, and the lower the quality of the exporter, the stronger the benefit.
Meanwhile, quality growth stocks are struggling due to higher starting valuations, strong competition from China and the adverse impact of yen depreciation, which increases costs for companies that need to import products and components into Japan. Software companies have also been subject to recent pressure due to concerns that AI will render their business models obsolete by replicating many software applications, thereby increasing competition and reducing licensing revenues.
Despite the headwinds this style rotation has generated, we are encouraged by the underlying performance of our portfolio holdings. Many are restructuring their business portfolios and strengthening their balance sheets to improve capital efficiency and enhance shareholder returns. Such efforts put these businesses on track to meet our definition of 'Quality', even if they do not yet exhibit all the characteristics we typically seek, and we expect this progress to be reflected in valuations over time. Other holdings are also performing strongly, due in part to their exposure to the AI revolution and rising defence spending, alongside a range of other supportive factors.
Significant contributors and detractors
The most notable contributors to performance over the six months to 31st March 2026 included Modec, one of the top two global operators of floating platform and storage and offloading (FPSO) facilities used in ultra deep-sea oil drilling. Strength in new orders boosted share price performance.
Watchmaker Seiko Group delivered strong results thanks to its luxury watch division, which is reaping the benefits of a new management team and the popular Prime Minister Takaichi spotted wearing their watches in the oval office and numerous other occasions! Advantest, which tests semiconductor equipment, continued to perform well thanks to AI-related demand.
Key detractors included Rakuten Bank, Japan's largest online bank. Rakuten is the only Japanese bank we classify as Quality-rated. Its shares fell sharply following the February 2026 announcement of plans for Rakuten Bank to acquire Rakuten Group's card and securities businesses. The market is concerned about the price Rakuten Bank will have to pay for these assets. Gaming companies Nintendo and Sony also detracted. Both these Quality-rated stocks were hurt by the rising price of memory chips, which could reduce the profitability of their consoles. Additionally, sales of Nintendo's new console, the Switch 2, have fallen short of expectations. Sanrio, the Quality-rated owner of intellectual property such as Hello Kitty, was hurt by concerns that deteriorating Sino-Japan relations may weaken Chinese demand for its products.
Portfolio activity
Our efforts to position the portfolio to benefit from key investment themes such as corporate governance reforms, the AI revolution and increased defence spending continued over the review period. For example, we purchased Sumitomo Electric, whose growth is being driven by surging demand for optical devices and cables integral to the adoption of AI tools and the construction of data centres. Additionally, the company has committed to enhancing shareholder returns and improving capital efficiency. The provision of data centre infrastructure is also supporting the earnings of Mitsubishi Electric, another recent addition to the portfolio, which is benefiting further from rising demand for robotics, energy systems and defence equipment. The appeal of this company is enhanced by the fact that it is undergoing a major restructuring to improve capital efficiency, including the de-consolidation or sale of its auto parts business. Japan Tobacco's strong shareholder returns policy was one reason behind our recent purchase. Furthermore, the company's fundamentals are very positive. It commands a leading market share and enjoys strong pricing power, high margins and robust free cash flow.
During the review period we made several outright sales. Most notably, we sold several companies due to concerns regarding the potential risks AI poses to their software businesses. Disposals included Hitachi, Nomura Research Institute, OBIC, Rakus and Toei Animation. We closed positions in convenience store operator Seven & I Holdings following the withdrawal of a bid for the company, and Sumitomo Densetsu, an electrical engineering business, which was the target of a successful takeover bid by Daiwa House. This sale of Sumitomo Densetsu was part of Sumitomo Electric's reorganisation of its subsidiaries.
|
Portfolio Characteristics - Six Months to 31st March 2026 |
'Index' |
|
|
Price to Earnings Ratio1 (next 12 months) |
18.6x |
16.2x |
|
Return on Equity1 |
13.7% |
9.7% |
|
Operating Margin1 |
17.4% |
14.1% |
|
Active Share1 |
93% |
|
|
Gearing - Start/End of period |
14.0% - 16.2% |
|
|
Turnover (annualised)1 |
38% |
|
1 Term is defined in Glossary of Terms and Alternative Performance Measures on pages 30 to 33 of the Half Year Report and Financial Statements.
Source: Factset/J.P. Morgan
Outlook
We remain very positive on the outlook for Japanese equities. As we mentioned in the Annual Report, although the market has performed strongly over the past two and a half years, we believe the transformation underway in Japan is still in its early stages. The full impact of corporate governance reforms has yet to be realised and should continue to support corporate balance sheets and dividend payouts. While other Asian markets have been following Japan's lead in adopting corporate reforms, the scale of Japan's efforts and the scope for improvement is unique. Companies hold too much cash and too many cross-shareholdings, and this is weighing on returns on equity (RoE) relative to other major markets. In addition, operating margins are lower in Japan than in Europe and the US. In our view, corporate reform is now entering a new phase in which the rationalisation of companies' business portfolios and balance sheets may lead to long-term improvement in profitability levels that will be a significant market driver for the foreseeable future.
Other supportive factors are also at work in the Japanese market, creating opportunities for the precisely the kind of high-quality, innovative companies we own. Perhaps the most notable trend is the modernisation and expansion of Japan's defence capabilities. Like the UK and many European countries, Japan can no longer depend on the military support of the US. Prime Minister Takaichi wants to increase military spending significantly and possibly change Japan's pacifist constitution. Export restrictions on military hardware are also being lifted. These developments mean defence is likely to be one of Japan's strongest growth areas over the next decade.
These developments have captured the attention of international investors, especially as valuations remain attractive relative to global peers - Japanese equities are still trading at a meaningful discount to the US despite the strong market gains seen in recent years. In 2019 Warren Buffet's Berkshire Hathaway initiated a widely publicised investment in five highly diversified Japanese conglomerates, giving it exposure to many sectors including energy, metals, food, and logistics. Berkshire Hathaway has since built its Japanese exposure, including the recent purchase of a stake in Tokio Marine, Japan's largest non-life insurer, which the Company also holds. The company's Japanese investments now comprise its single largest position outside the US. Another consequence of increased foreign interest is the surge in merger and acquisition (M&A) activity, especially unsolicited bids, which is injecting further dynamism into the market.
As ever, there are risks to monitor. We are keeping a close eye on the negative effects of AI on software companies and other sectors vulnerable to disruption. We are also watching events in the Middle East. Japan is a major energy importer and roughly half its petroleum imports transit the Strait of Hormuz, although petrol subsidies are currently protecting consumers from the full impact of global oil price rises., Higher input costs are also a risk to large swathes of the Japanese stock market, but in the longer run, the outbreak of conflict with Iran may speed up the restart of Japan's nuclear facilities. Meantime these nascent energy price pressures further complicate the BoJ's task, as it seeks to balance the need to hike rates further to suppress inflation and support the yen against the risk of damaging already fragile economic growth.
Our highly experienced Tokyo-based investment analysts are exceptionally well-placed to identify and capture the myriad opportunities generated by the changes afoot in Japan. The team's on-the-ground location at the heart of this market allows it to uncover insights and investment ideas often overlooked by foreign-based analysts. We view this as a significant competitive advantage, which, allied with the high quality of our portfolio holdings, leaves us confident in the Company's ability to continue delivering capital growth and sustained outperformance for shareholders over the long term. We look forward to reporting on our progress as Japan's exciting transformation unfolds.
Thank you for your investment.
Nicholas Weindling
Miyako Urabe
Xuming Tao
Portfolio Managers 29th May 2026
INTERIM MANAGEMENT REPORT
The Company is required to make the following disclosures in its half year report.
Principal and Emerging Risks and Uncertainties
The Directors confirm that they have carried out a robust assessment of the principal and emerging risks facing the Company, including those that would threaten its business model, future performance, solvency or liquidity. With the assistance of JPMF, the Audit & Risk Committee has drawn up a risk matrix, which identifies the key risks to the Company. These are reviewed and noted by the Board. The Board believes that the principal and emerging risks and uncertainties faced by the Company fall into the following broad categories:
• Market and Economic Risks - including market volatility and external factors, discount widening and lack of investor demand, liquidity risks.
• Trust Specific Risks - including poor strategy selection, poor execution of strategy, gearing and loan covenants risk, change in portfolio manager, statutory and regulatory compliance risk, cybercrime.
• Geopolitical Risks - including natural disasters and climate change risk.
Information on each of these areas is given on pages 40 to 42 of the Strategic Report within the Annual Report and Financial Statements for the year ended 30th September 2025.
Related Parties 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 the performance of the Company during the period.
Going Concern
In accordance with The Financial Reporting Council's guidance on going concern and liquidity risk, the Directors have undertaken a rigorous review of the Company's ability to continue as a going concern.
The Board has, in particular, considered the impact of heightened market volatility since the conflict between the USA, Israel and Iran caused the closure of the Strait of Hormuz and the Russian invasion of Ukraine, the persistent inflationary environment, rising interest rates and other geopolitical risks, and does not believe the Company's going concern status is affected. The Company's assets, the vast majority of which are investments in quoted securities which are readily realisable, exceed its liabilities significantly under all stress test scenarios reviewed by the Board. Gearing levels and compliance with borrowing covenants are reviewed by the Board on a regular basis. Furthermore, the Company's key third party suppliers, including its Manager are not experiencing any operational difficulties which would adversely affect their services to the Company.
Accordingly, having assessed the principal and emerging risks and other matters, the Directors believe that there are no material uncertainties pertaining to the Company that would prevent its ability to continue in such operational existence for at least 12 months from the date of the approval of this half yearly financial report.
Directors' Responsibilities
The Board of Directors confirms that, to the best of its knowledge:
(i) the condensed set of financial statements contained within the interim financial report has been prepared in accordance with FRS 104 'Interim Financial Reporting' and gives a true and fair view of the state of the affairs of the Company and of the assets, liabilities, financial position and net return of the Company, as at 31st March 2026, as required by the UK Listing Authority Disclosure Guidance and Transparency Rule ('DTR') 4.2.4R; and
(ii) the interim management report includes a fair review of the information required by DTR 4.2.7R and DTR 4.2.8R.
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 accounting 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.
For and on behalf of the Board
Stephen Cohen
Chairman 29th May 2026
CONDENSED STATEMENT OF COMPREHENSIVE INCOME
|
|
(Unaudited) |
(Unaudited) |
(Audited) |
||||||
|
|
Six months ended |
Six months ended |
Year ended |
||||||
|
|
31st March 2026 |
31st March 2025 |
30th September 2025 |
||||||
|
|
Revenue |
Capital |
Total |
Revenue |
Capital |
Total |
Revenue |
Capital |
Total |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Gains on investments held at |
|
|
|
|
|
|
|
|
|
|
fair value through profit or loss1 |
- |
17,087 |
17,087 |
- |
3,155 |
3,155 |
- |
190,198 |
190,198 |
|
(Losses)/gains on derivative |
|
|
|
|
|
|
|
|
|
|
financial instruments |
- |
(5,121) |
(5,121) |
- |
7,223 |
7,223 |
- |
36,165 |
36,165 |
|
Net foreign currency exchange gains2 |
- |
970 |
970 |
- |
2,207 |
2,207 |
- |
3,317 |
3,317 |
|
Income from investments |
10,749 |
- |
10,749 |
9,134 |
53 |
9,187 |
17,970 |
64 |
18,034 |
|
Income from derivative instruments |
1,355 |
- |
1,355 |
1,065 |
- |
1,065 |
1,889 |
- |
1,889 |
|
Interest receivable and similar income |
181 |
- |
181 |
125 |
- |
125 |
256 |
- |
256 |
|
Gross return |
12,285 |
12,936 |
25,221 |
10,324 |
12,638 |
22,962 |
20,115 |
229,744 |
249,859 |
|
Management fee3 |
(292) |
(2,626) |
(2,918) |
(91) |
(814) |
(905) |
(357) |
(3,217) |
(3,574) |
|
Other administrative expenses |
(668) |
- |
(668) |
(630) |
- |
(630) |
(1,332) |
- |
(1,332) |
|
Net return before finance |
|
|
|
|
|
|
|
|
|
|
costs and taxation |
11,325 |
10,310 |
21,635 |
9,603 |
11,824 |
21,427 |
18,426 |
226,527 |
244,953 |
|
Finance costs |
(94) |
(844) |
(938) |
(83) |
(744) |
(827) |
(176) |
(1,581) |
(1,757) |
|
Net return before taxation |
11,231 |
9,466 |
20,697 |
9,520 |
11,080 |
20,600 |
18,250 |
224,946 |
243,196 |
|
Taxation |
(1,075) |
- |
(1,075) |
(913) |
- |
(913) |
(1,797) |
- |
(1,797) |
|
Net return after taxation |
10,156 |
9,466 |
19,622 |
8,607 |
11,080 |
19,687 |
16,453 |
224,946 |
241,399 |
|
Return per ordinary share (note 3) |
6.38p |
5.95p |
12.33p |
5.32p |
6.85p |
12.17p |
10.15p |
138.75p |
148.90p |
1 Includes foreign currency gains or losses on investments.
2 Foreign currency gains are due to Yen denominated loan notes and bank loans.
3 During the year to 30th September 2025, the Manager waived its management fee in lieu of its contribution towards the total costs associated with the Company's combination with JSGI. Further details on the Manager's Contribution can be found in the 30th September 2025 Annual Report and Financial Statements.
All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued in the period. During the year ended 30th September 2025, the Company acquired the assets of JPMorgan Japan Small Cap Growth & Income plc (JSGI) following a scheme of reconstruction.
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 net return after taxation represents the profit for the period and also the total comprehensive income.
CONDENSED STATEMENT OF CHANGES IN EQUITY
|
|
Called up |
Share |
Capital |
|
|
|
|
|
|
share |
premium |
redemption |
Other |
Capital |
Revenue |
|
|
|
capital |
account |
reserve1 |
reserve1 |
reserves1 |
reserve1 |
Total |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Six months ended 31st March 2026 |
|
|
|
|
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
At 30th September 2025 |
46,153 |
138,549 |
8,650 |
166,791 |
833,079 |
26,902 |
1,220,124 |
|
Buyback of ordinary shares into Treasury |
- |
- |
- |
- |
(33,171) |
- |
(33,171) |
|
Net return after taxation |
- |
- |
- |
- |
9,466 |
10,156 |
19,622 |
|
Dividend paid in the period (note 4) |
- |
- |
- |
- |
- |
(13,855) |
(13,855) |
|
At 31st March 2026 |
46,153 |
138,549 |
8,650 |
166,791 |
809,374 |
23,203 |
1,192,720 |
|
Six months ended 31st March 2025 |
|
|
|
|
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
At 30th September 2024 |
40,312 |
- |
8,650 |
166,791 |
641,289 |
21,561 |
878,603 |
|
Buyback of ordinary shares into Treasury |
- |
- |
- |
- |
(17,711) |
- |
(17,711) |
|
Issue of ordinary shares in respect of the |
|
|
|
|
|
|
|
|
combination with JSGI2 |
5,841 |
138,713 |
- |
- |
- |
- |
144,554 |
|
Costs in relation to issue of ordinary shares |
- |
(164) |
- |
- |
- |
- |
(164) |
|
Net return after taxation |
- |
- |
- |
- |
11,080 |
8,607 |
19,687 |
|
Dividend paid in the period (note 4) |
- |
- |
- |
- |
- |
(11,112) |
(11,112) |
|
At 31st March 2025 |
46,153 |
138,549 |
8,650 |
166,791 |
634,658 |
19,056 |
1,013,857 |
|
Year ended 30th September 2025 (Audited) |
|
|
|
|
|
|
|
|
At 30th September 2024 |
40,312 |
- |
8,650 |
166,791 |
641,289 |
21,561 |
878,603 |
|
Buyback of ordinary shares into Treasury |
- |
- |
- |
- |
(33,156) |
- |
(33,156) |
|
Issue of ordinary shares in respect |
|
|
|
|
|
|
|
|
of the combination with JSGI2 |
5,841 |
138,713 |
- |
- |
- |
- |
144,554 |
|
Costs in relation to issue of |
|
|
|
|
|
|
|
|
ordinary shares |
- |
(164) |
- |
- |
- |
- |
(164) |
|
Net return after taxation |
- |
- |
- |
- |
224,946 |
16,453 |
241,399 |
|
Dividend paid in the year (note 4) |
- |
- |
- |
- |
- |
(11,112) |
(11,112) |
|
At 30th September 2025 |
46,153 |
138,549 |
8,650 |
166,791 |
833,079 |
26,902 |
1,220,124 |
1 The Capital redemption reserve is not distributable under the Companies Act 2006.
The Other reserve of £166,791,000 was created during the year ended 30th September 1999, following a cancellation of the share premium account, and forms part of the Company's distributable reserves.
In accordance with the Company's Articles of Association and with ICAEW Technical Release 02/17BL on Guidance on Realised and Distributable Profits under the Companies Act 2006, the Capital reserves may be used as distributable profits for all purposes and, in particular, the buyback by the Company of its ordinary shares and for payments of dividends.
As at 31st March 2026, the £809,374,000 Capital reserves comprise net gains on the sale of investments amounting to £461,924,000, a gain from the revaluation of investments still held totalling £312,688,000 and an exchange gain on the foreign currency loans of £34,762,000. The £34,762,000 of capital reserves, resulting from the exchange gain on the foreign currency loan, is not distributable. The remaining Capital reserves, totalling £774,612,000, are subject to fair value movements, to the extent they represent realised profits, may not be readily realisable at short notice, and therefore may not be entirely distributable.
The investments are subject to financial risks, therefore Capital reserves (arising on investments sold) and Revenue reserve may not be entirely distributable if a loss occurred during the realisation of these investments.
2 During the year to 30th September 2025, the Company acquired the assets of JPMorgan Japan Small Cap Growth & Income plc (JSGI), following a scheme of reconstruction ('Combination').
CONDENSED STATEMENT OF FINANCIAL POSITION
|
|
(Unaudited) |
(Unaudited) |
(Audited) |
|
|
At |
At |
At |
|
|
31st March |
31st March |
30th September |
|
|
2026 |
2025 |
2025 |
|
|
£'000 |
£'000 |
£'000 |
|
Fixed assets |
|
|
|
|
Investments held at fair value through profit or loss |
1,169,554 |
834,776 |
1,042,303 |
|
Investments on loan held at fair value through profit or loss |
64,046 |
199,094 |
174,115 |
|
Total investments held at fair value through profit or loss |
1,233,600 |
1,033,870 |
1,216,418 |
|
Current assets |
|
|
|
|
Derivative financial assets |
598 |
592 |
7,952 |
|
Debtors |
9,637 |
12,185 |
7,071 |
|
Cash at bank |
22,052 |
40,740 |
58,286 |
|
Amounts held with clearing houses and brokers |
- |
11 |
- |
|
|
32,287 |
53,528 |
73,309 |
|
Creditors: amounts falling due within one year |
(2,620) |
(1,266) |
(1,450) |
|
Derivative financial liabilities |
(8,858) |
(5,194) |
(3,020) |
|
Net current assets |
20,809 |
47,068 |
68,839 |
|
Total assets less current liabilities |
1,254,409 |
1,080,938 |
1,285,257 |
|
Creditors: amounts falling due after more than one year |
(61,689) |
(67,081) |
(65,133) |
|
Net assets |
1,192,720 |
1,013,857 |
1,220,124 |
|
Capital and reserves |
|
|
|
|
Called up share capital |
46,153 |
46,153 |
46,153 |
|
Share premium account |
138,549 |
138,549 |
138,549 |
|
Capital redemption reserve |
8,650 |
8,650 |
8,650 |
|
Other reserve |
166,791 |
166,791 |
166,791 |
|
Capital reserves |
809,374 |
634,658 |
833,079 |
|
Revenue reserve |
23,203 |
19,056 |
26,902 |
|
Total equity shareholders' funds |
1,192,720 |
1,013,857 |
1,220,124 |
|
Net asset value per ordinary share (note 5) |
762.4p |
620.6p |
757.9p |
CONDENSED STATEMENT OF CASH FLOWS
|
|
(Unaudited) |
(Unaudited) |
(Audited) |
|
|
Six months ended |
Six months ended |
Year ended |
|
|
31st March |
31st March |
30th September |
|
|
2026 |
2025 |
2025 |
|
|
£'000 |
£'000 |
£'000 |
|
Cash flows from operating activities |
|
|
|
|
Net return before finance costs and taxation |
21,635 |
21,427 |
244,953 |
|
Adjustment for: |
|
|
|
|
Net gains on investments held at fair value through |
|
|
|
|
profit or loss |
(17,087) |
(3,155) |
(190,198) |
|
Net losses/(gains) on derivative financial instruments |
5,121 |
(7,223) |
(36,165) |
|
Net foreign currency exchange gains |
(970) |
(2,207) |
(3,317) |
|
Dividend income |
(10,749) |
(9,187) |
(18,034) |
|
Interest and stock lending income |
(181) |
(6) |
(256) |
|
Income from derivative financial instruments |
(1,355) |
(1,065) |
(1,889) |
|
Realised (losses)/gains on foreign exchange transactions |
(2,478) |
632 |
(454) |
|
(Increase)/decrease in other debtors |
(62) |
(75) |
24 |
|
(Decrease)/increase in accrued expenses |
(24) |
(16) |
13 |
|
Net cash outflow from operations before dividends and interest |
(6,150) |
(875) |
(5,323) |
|
Dividends received |
7,690 |
8,025 |
16,786 |
|
Interest and stock lending income received |
181 |
6 |
256 |
|
Net cash inflow from operating activities |
1,721 |
7,156 |
11,719 |
|
Purchases of investments |
(290,825) |
(187,697) |
(380,539) |
|
Sales of investments |
289,736 |
261,576 |
463,846 |
|
Net settlement of derivative financial instruments |
8,853 |
11,825 |
31,233 |
|
Income from derivative financial instruments received |
835 |
- |
1,102 |
|
Amounts held at clearing houses and brokers |
- |
(11) |
- |
|
Interest paid on CFDs |
(580) |
(198) |
(584) |
|
Costs paid in respect of the combination with JSGI |
- |
(882) |
(882) |
|
Net cash inflow from investing activities |
8,019 |
84,613 |
114,176 |
|
Dividend paid (note 4) |
(13,855) |
(11,112) |
(11,112) |
|
Net cash acquired following the combination with JSGI |
- |
5,895 |
5,895 |
|
Costs in relation to issue of ordinary shares |
- |
(164) |
(164) |
|
Buyback of ordinary shares into Treasury |
(31,767) |
(17,418) |
(33,712) |
|
Repayment of bank loan |
- |
(50,958) |
(50,958) |
|
Interest paid |
(348) |
(780) |
(1,305) |
|
Net cash outflow from financing activities |
(45,970) |
(74,537) |
(91,356) |
|
(Decrease)/increase in cash and cash equivalents |
(36,230) |
17,232 |
34,539 |
|
Cash and cash equivalents at start of period/year |
58,286 |
23,497 |
23,497 |
|
Foreign currency exchange movements |
(4) |
11 |
250 |
|
Cash and cash equivalents at end of period/year |
22,052 |
40,740 |
58,286 |
|
Cash and cash equivalents consist of: |
|
|
|
|
Cash at bank |
22,052 |
40,740 |
58,286 |
|
Total |
22,052 |
40,740 |
58,286 |
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
For the six months ended 31st March 2026
1. Financial statements
The information contained within the financial statements in this half year report has not been audited or reviewed by the Company's auditor.
The information contained within the financial statements in this half year report does not constitute statutory accounts as defined by sections 434 and 436 of the Companies Act 2006 and has not been audited or reviewed by the Company's auditors.
The figures and financial information for the year ended 30th September 2025 are extracted from the latest published financial statements of the Company. The financial statements for the year ended 30th September 2025 have been delivered to the Registrar of Companies including the report of the auditors which was unqualified and did not contain a statement under either section 498(2) or 498(3) of the Companies Act 2006.
2. Accounting policies
FRS 104, 'Interim Financial Reporting', issued by the Financial Reporting Council ('FRC'), has been applied in preparing this condensed set of financial statements for the six months ended 31st March 2026.
The condensed financial statements are prepared in accordance with the Companies Act 2006, United Kingdom Generally Accepted Accounting Practice ('UK GAAP') including FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' 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 July 2022.
All of the Company's operations are of a continuing nature.
The Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for at least 12 months from the date of approval of these condensed financial statements. Accordingly, the Directors consider it appropriate to adopt the going concern basis of accounting in preparing these condensed financial statements. This conclusion takes into account the Director's assessment of the risks faced by the Company as detailed in the Interim Management Report on page 28 of the Half Year Report and Financial Statements.
The accounting policies applied to this condensed set of financial statements are consistent with those applied in the financial statements for the year ended 30th September 2025.
3. Return per ordinary share
|
|
(Unaudited) |
(Unaudited) |
(Audited) |
|
|
Six months ended |
Six months ended |
Year ended |
|
|
31st March |
31st March |
30th September |
|
|
2026 |
2025 |
2025 |
|
|
£'000 |
£'000 |
£'000 |
|
Return per ordinary share is based on the following: |
|
|
|
|
Revenue return |
10,156 |
8,607 |
16,453 |
|
Capital return |
9,466 |
11,080 |
224,946 |
|
Total return |
19,622 |
19,687 |
241,399 |
|
Weighted average number of ordinary shares in issue |
|
|
|
|
during the period/year |
159,169,560 |
161,744,627 |
162,120,253 |
|
Revenue return per ordinary share |
6.38p |
5.32p |
10.15p |
|
Capital return per ordinary share |
5.95p |
6.85p |
138.75p |
|
Total return per ordinary share |
12.33p |
12.17p |
148.90p |
4. Dividends paid
|
|
(Unaudited) |
(Unaudited) |
(Audited) |
|||
|
|
Six months ended |
Six months ended |
Year ended |
|||
|
|
31st March |
31st March |
30th September |
|||
|
|
2026 |
|
2025 |
|
2025 |
|
|
|
Pence |
£'000 |
Pence |
£'000 |
Pence |
£'000 |
|
Dividend paid |
|
|
|
|
|
|
|
Final dividend in respect of prior year |
8.70 |
13,855 |
6.75 |
11,112 |
6.75 |
11,112 |
All dividends paid in the period have been funded from the revenue reserve (2025: same).
No interim dividend has been declared in respect of the six months ended 31st March 2026 (2025: nil).
5. Net asset value per ordinary share
The net asset value per ordinary share and the net asset value attributable to the ordinary shares at the period end are shown below. These were calculated using 156,451,203 (31st March 2025: 163,370,203 & 30th September 2025: 160,978,203) ordinary shares in issue at the period end (excluding shares held in Treasury).
|
|
(Unaudited) |
(Unaudited) |
(Audited) |
|||
|
|
Six months ended |
Six months ended |
Year ended |
|||
|
|
31st March |
31st March |
30th September |
|||
|
|
2026 |
2025 |
2025 |
|||
|
|
Net asset |
Net asset |
Net asset |
|||
|
|
value attributable |
value attributable |
value attributable |
|||
|
|
£'000 |
pence |
£'000 |
pence |
£'000 |
pence |
|
Net asset value - debt at par value |
1,192,720 |
762.4 |
1,013,857 |
620.6 |
1,220,124 |
757.9 |
|
¥13 billion senior secured loan notes: |
|
|
|
|
|
|
|
Add: amortised cost |
61,689 |
39.4 |
67,081 |
41.1 |
65,133 |
40.5 |
|
Less: fair value |
(45,354) |
(29.0) |
(55,461) |
(34.0) |
(51,895) |
(32.2) |
|
Net asset value - debt at fair value |
1,209,055 |
772.8 |
1,025,477 |
627.7 |
1,233,362 |
766.2 |
6. Fair valuation of instruments
The fair value hierarchy disclosures required by FRS 102 are given below:
|
|
(Unaudited) |
(Unaudited) |
(Audited) |
|||
|
|
Six months ended |
Six months ended |
Year ended |
|||
|
|
31st March |
31st March |
30th September |
|||
|
|
2026 |
2025 |
2025 |
|||
|
|
Assets |
Liabilities |
Assets |
Liabilities |
Assets |
Liabilities |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Level 1 |
1,233,600 |
- |
1,033,870 |
- |
1,216,418 |
- |
|
Level 21 |
598 |
(8,858) |
592 |
(5,194) |
7,952 |
(3,020) |
|
Total |
1,234,198 |
(8,858) |
1,034,462 |
(5,194) |
1,224,370 |
(3,020) |
1 Consists of the fair value of derivative financial instruments (long CFDs), calculated as the difference between the initial contract price of the CFD and the market value of the underlying investment, and is presented as derivative financial assets or derivative financial liabilities in the Condensed Statement of Financial Position.
7. Analysis of changes in net debt
|
|
|
|
Foreign |
|
|
|
|
At |
|
currency |
Other |
At |
|
|
30th September |
|
exchange |
non-cash |
31st March |
|
|
2025 |
Cash flows |
movements |
transactions1 |
2026 |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Cash and cash equivalents |
|
|
|
|
|
|
Cash at bank |
58,286 |
(36,230) |
(4) |
- |
22,052 |
|
|
58,286 |
(36,230) |
(4) |
- |
22,052 |
|
Borrowings |
|
|
|
|
|
|
Debt due after one year |
(65,133) |
- |
3,452 |
(8) |
(61,689) |
|
|
(65,133) |
- |
3,452 |
(8) |
(61,689) |
|
Net debt |
(6,847) |
(36,230) |
3,448 |
(8) |
(39,637) |
1 Other non-cash transactions include amortisation adjustment.
JPMORGAN FUNDS LIMITED
1st June 2026
For further information, please contact:
Paul Winship
For and on behalf of
JPMorgan Funds Limited
Telephone: 0800 20 40 20 or or +44 1268 44 44 70
E-mail: jpmam.investment.trusts@jpmorgan.com
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.
ENDS
A copy of the half year will be submitted to the National Storage Mechanism and will shortly be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism
The Half Year Report will also shortly be available on the Company's website www.jpmjapanese.co.uk where up to date information on the Company, including daily NAV and share prices, factsheets and portfolio information can also be found.
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