Annual Financial Report

RNS Number : 4241C

Jupiter European Opps. Trust PLC

28 September 2018

 

Jupiter European Opportunities Trust plc (the "Company")

Annual Financial Report for the year ended 31 May 2018

This announcement contains regulated information

Financial Highlights for the year ended 31 May 2018

Capital Performance	31 May 2018	31 May 2017	% change
Total assets less current liabilities (£'000)	873,195	795,012	+9.8
Ordinary Share Performance	31 May 2018	31 May 2017	% change
Net asset value (pence)	778.94	712.53	+9.3
Net asset value (with dividends added back) (pence)	785.44	712.53	+10.2
Middle market price (pence)	770.00	692.00	+11.3
FTSE World Europe ex UK Total Return Index1	1,338.77	1,326.57	+0.9
Discount to net asset value (%)	(1.1)	(2.9)	-
Ongoing charges figure (%)2	0.91	0.99	-

Performance Since Launch

				Year-
			Net	on-year
		Total	Asset	change in	Year-
		Assets	Value	Net Asset	on-year
		less	per	Value per	change in
		Current	Ordinary	Ordinary	Benchmark
		Liabilities	Share	Share	Index
Year ended 31 May		£'000	p	%	%
20 November 2000	(launch)	93,969	94.66	-	-
2001		83,600	89.29	-5.7	-8.0
2002		91,028	91.12	+2.0	-10.7
2003		84,592	83.82	-8.0	-19.0
2004		97,915	109.25	+30.3	+15.7
2005	(restated)3	117,679	133.54	+22.2	+19.3
2006		154,927	167.47	+25.4	+26.2
2007		182,278	224.58	+34.1	+30.0
2008		188,519	230.56	+2.7	-0.1
2009		131,457	162.35	-29.6	-25.3
2010		185,504	232.40	+43.1	+14.4
2011		252,813	316.73	+36.3	+24.2
2012		231,584	291.05	-8.1	-24.2
2013		340,801	403.58	+38.7	+43.3
2014		409,191	451.26	+11.8	+13.4
2015		558,389	546.27	+21.1	+4.7
2016		613,922	550.23	+0.7	-3.7
2017		795,012	712.53	+29.5	+35.7
2018		873,195	778.94	+9.3	+0.9

1      This document contains information based on the FTSE World Europe ex UK Total Return Index. FTSE is a trade mark jointly owned by the London Stock Exchange Plc and The Financial Times Limited and is used by FTSE International Limited (FTSE) under licence. The FTSE World Europe ex UK Total Return Index is calculated by the FTSE. FTSE does not sponsor, endorse or promote the product referred to in this document and is not in any way connected to it and does not accept any liability in relation to its issue, operation and trading. All copyright and database rights in the index values and constituent list vest in FTSE.

2      Excluding finance costs (interest on the Company's loan facility).

3      Prior to 2005, financial information was prepared under UK GAAP. From 2006 all information is prepared under IFRS.

Strategic Report

Chairman's Statement

I am pleased to present the Annual Report for the Jupiter European Opportunities Trust PLC for the year to 31 May 2018, being my first full year as your Company's chairman.

During the twelve months to 31 May 2018 the total return on the net asset value per share of your Company was 10.2 per cent (with dividends added back). This compares with an increase in the Company's benchmark index, the FTSE World Europe ex UK Total Return Index, of 0.9 per cent and a total return on the middle market price of the Company's shares of 11.3 per cent (again with dividends added back) during the same period.

Since 31 May 2018 the total return on the net asset value per share of your Company was 9.5 per cent. as at 21 September 2018, which compares with a total return of 4.9 per cent. from the benchmark Index during the same period. The market price of your Company's shares had increased by 11.9 per cent to 862.0p as at that date.

As at 31 May 2018 the Company had total assets (with loans added back) under management of £933 million. Jupiter European Opportunities Trust PLC was added to the FTSE 250 index on the London Stock Exchange effective 31 October 2017.

The background to the performance of your Company over the course of the financial year is discussed in detail by Alexander Darwall in his Investment Adviser's review overleaf and I will not seek to cover the same ground here.

Dividend

Jupiter European Opportunities Trust PLC paid a dividend last year, in order to retain our status as an investment trust under Section 1158 of the Corporation Tax Act 2010. As the Company is not permitted to retain more than 15 per cent. of eligible investment income arising during any given financial year, a resolution to declare a final dividend of 6.5p per share (unchanged on 2017) will be proposed at the Company's Annual General Meeting ('AGM') on 7 November 2018, payable on 17 December 2018 to shareholders on the Register of Shareholders on 16 November 2018.

This dividend is being declared for the sole reason that the Company has no choice under Section 1158 of the Corporation Tax Act 2010 other than to pay a dividend in relation to the financial year under review. The declaration of the dividend as a final dividend will also provide shareholders with an opportunity to express their approval on the matter, in line with corporate governance guidelines. In the unlikely event that shareholders were to vote against the resolution at the AGM to pay a final dividend then the directors would pay an equivalent interim dividend, as otherwise the Company would be likely to lose investment trust status, with potentially disastrous tax consequences for a large number of its shareholders.

Fees

During the financial year to 31 May 2018 a performance fee of £13 million, equal to 1.4 per cent of the Company's net assets, was earned by the Investment Adviser as a result of the Company's significant net outperformance of its benchmark index. It should be noted that these fees are subject to both a 'high water mark' (meaning that a performance fee can only be paid if the net asset value at the end of the year is higher than the net asset value at the end of the year in respect of which a performance fee was last paid) and the hurdle of outperforming the total return on the benchmark index. There is also a cap on the aggregate fees that may be paid to the Investment Adviser in any one financial year of 4.99% of net assets. Shareholders have enjoyed a total return on their shares of 10.2 per cent during the year to 31 May 2018, which compares with a weighted average return from its peer group of closed ended funds of 5.1 per cent. and a total return of 0.9 per cent from its benchmark index.

The Company's benchmark index since launch, the FTSE World Europe ex UK Total Return Index, has a nil weighting to UK listed companies, whereas your Company has a 16 per cent. weighting to UK listed companies and the comparable FTSE All World Europe (including UK) Index has a 29 per cent. weighting to UK listed companies. The portfolio manager considers the locus of activities for investee companies to be more relevant than the venue of listing, with many 'European' companies choosing historically to list on the more liquid London Stock Exchange than elsewhere. Since launch in November 2000 the FTSE World Europe ex UK Total Return Index has produced a total return of 171.7 per cent whereas the FTSE World Europe Inc UK Total Return Index has produced a return of 159.3 per cent and your Company has produced a total net asset value return of 757.8 per cent (net of all fees and expenses). The FTSE World Europe ex UK Total Return Index outperformed the FTSE World Europe Inc UK Total Return Index over the 3 and 5-year periods to 31 May 2018. Accordingly, the board consider the FTSE World Europe ex UK Total Return Index to be the most appropriate benchmark index for the Company; it has in recent years been the more challenging index for the portfolio manager to outperform and the board consider it likely to continue to be the more challenging index to beat over the medium term.

Over the ten year period to 31 May 2018, an investment of £10,000 in your Company would have grown to £26,350 net of all management and performance fee costs. This compares with an average return of £15,040 for the eight investment trusts (including your Company) in the relevant peer group.

Your board discusses the management and performance fee arrangements with the Investment Adviser and its independent brokers and other advisers on a regular and ongoing basis. For the time being your board feels that retention of the performance fee structure continues to be fair and reasonable.

Share issuance

The board is committed to using share buy backs and new issues of shares for the purpose of managing the liquidity in the Company's shares on the London Stock Exchange. As at 21 September 2018, the share price stood at a premium of 1.1 per cent.

During the twelve months to 31 May 2018, the Company issued a total of 525,000 shares at a small premium to their underlying net asset value. Over the past five years the issue of shares at a premium to their net asset value has added a total of £35,023 to the net assets of the Company, to the benefit of all shareholders.

Shareholders should note there can be no guarantee that any liquidity management policy implemented by the board will necessarily have its desired effect. The making and timing of share buy backs and the new issuance of shares are subject to a number of legal and regulatory regulations and, subject to these, will remain at the discretion of the board.

Gearing

'Gearing' may be defined as the ratio of a company's debt, less cash held, compared to its equity capital, expressed as a percentage. The effect of gearing is that where the value of the investment portfolio increases, all the increase accrues to the shareholders whereas when the value falls, the shareholders suffer the whole of the reduction. Holders of the Company's debt are not affected by such increases or reductions, provided that the portfolio value remains sufficient to cover the debt.

In order to improve the potential for capital returns to shareholders the Company currently has access to a flexible loan facility with Scotiabank Europe PLC for amounts up to £100 million. As at 31 May 2018 the Company's gearing level was 4.9 per cent. and as at 21 September 2018 was 3.4 per cent.

The directors consider it a priority that the Company's level of gearing should be maintained at appropriate levels with sufficient flexibility to enable the portfolio manager to adapt at short notice to changes in market conditions. The board reviews the Company's level of gearing on a regular basis. The current maximum that has been set is 20 per cent. of the Company's total assets.

Board composition

Following last year's AGM, we appointed Virginia Holmes as a director and we welcome her to the board.

All the current directors will offer themselves for re-election at the AGM.

Key information documents

We are required by the Packaged Retail and Insurance-based Investment Products (PRIIPs) regulations introduced at the beginning of 2018 to provide investors with a key information document ("KID") which includes performance projections which are the product of prescribed calculations based on the Company's past performance. Whilst the content and format of the KID cannot be amended under the applicable EU regulations, the board does not believe that these projections are an appropriate or helpful way to assess the Company's future prospects.

Accordingly, the board urges shareholders also to consider the more complete information set out in the Company's  interim and annual report and accounts, together with the monthly fact sheets and daily net asset value announcements, when considering an investment in the Company's shares. These documents, together with a link to some useful third party research coverage of the Company are published at www.jupiteram.com/JEO.

Annual General Meeting

The Company's Annual General Meeting will be held on 7 November 2018 at 11:00 a.m. at the offices of Jupiter Asset Management Limited, The Zig Zag Building, 70 Victoria Street, London SW1E 6SQ.

In addition to the formal business, Alexander Darwall will provide a short presentation to shareholders on the performance of the Company over the past year as well as an outlook for the future. The board would welcome your attendance at the Annual General Meeting as it provides shareholders with an opportunity to ask questions of both the board and the Investment Adviser.

Outlook

Economic uncertainties and threats exist at all times. At present, in addition to geo-political developments in Europe and elsewhere, we are faced with the possibility of higher interest rates, trade tariffs and slower economic growth. While these can affect all companies, the Investment Adviser continues to concentrate on companies with strong management, good cashflow and attributes that are innovative or differentiated from others in their sector. The Investment Adviser has had considerable success in producing consistent outperformance over a number of years and I am confident that over the medium to long term this success will continue.

Andrew Sutch

Chairman

28 September 2018

Investment Adviser's Review

The Net Asset Value of the Company's Ordinary shares (with dividends added back) rose 10.2% during the twelve months to 31 May 2018. This compares with a 0.9% rise, in sterling, of the FTSE World Europe ex UK Index. The level of the Company's borrowings at the financial year-end was £60.0 million (2017: £117.9 million). Borrowings represented 4.9% of net assets at the period end, having been 7.7% twelve months earlier. Borrowing rates were slightly higher than in the previous reporting period at around 1.4%. The FTSE World (total return) Index was up 8.7% in sterling during the twelve months under review. The S&P500 Index returned 10.9% in sterling; the MSCI Latin America Index was barely changed in sterling (+1.0%) reflecting the political turmoil and concomitant economic disappointments in Brazil and Argentina. There were better returns in the East. Asian markets (excluding Japan) posted a 14.0% gain. The Hang Seng Index was the standout performer, recording a 19.0% return.

The global economic growth rate is, according to the forecasters, increasing. The International Monetary Fund (IMF) has increased its forecasts for 2018 steadily over the last eighteen months, now expecting a figure of 3.9%. The salient reason for this steady increase is stronger US economic growth: over the same eighteen-month period the IMF raised its US Gross Domestic Product forecasts from 2.1% to 2.9%. It is likely that the final outturn for 2018 will be a yet higher growth rate in the US. By comparison the IMF expects the Euro Area to deliver 2.4% growth in 2018. Whereas President Trump is boosting business activity by lowering tax rates, the European countries (including the UK) are planning tax rises, thereby choking economic activity. Energy costs rose sharply over the course of the reporting period, reversing the trend of recent years. At the end of the reporting period the price for WTI oil was up 38.1% to $67.0. The European Central Bank's (ECB's) main refinancing rate was 0% as it was throughout the preceding twelve months; and three-month Euribor was -0.3% at the end of May 2018, almost exactly the same figure as a year earlier. These historically low or negative interest rates are central to the policymakers' aim to stimulate investment. The ECB's May 2018 loan volume data show that year to date aggregate loan growth is 3.2%. Corporate loan growth is increasing at a slightly higher rate than household loan growth. Loan growth is not necessarily the same thing as increasing new investment activity. Loan growth can also be explained by the increase in mergers and acquisition (M&A) activity of which the biggest deal in Europe in recent months has been the acquisition of Monsanto by Bayer. Much of this M&A is aimed at cost optimisation rather than capacity building.

Artificially low interest rates, the manifestation of the Quantitative Easing (QE) policy, have had two other obvious effects. Lower interest costs are one factor behind the increase in corporate earnings growth. Consensus estimates for the constituents of the MSCI Europe Index are for European companies' earnings to grow by 8.8% this year after 14.5% in 2017. And low interest rates have undoubtedly boosted valuations in the stock market. QE has lifted equity valuations markedly.

Your Company's performance is not well correlated to economic or stock market conditions. The relative success of the portfolio was due to a coincidence of performance from a diverse group of stocks. The same can be said when the outcome is bad: individual stock performance is the key to understanding the portfolio's progress. There were two significant detractors to performance. The worst was Provident Financial, the UK non-standard credit company. We failed to recognise the vulnerability of the business model and management failings. Recognising our mistake, we sold the holding. Inmarsat, the UK based satellite company, has also been a poor investment. There has been price pressure in its core maritime business whilst its new broadband offering for air travel is still starting up. Results have been disappointing.

Nevertheless, we have decided to retain this investment. The underlying rationale, namely that it is singularly well placed to benefit from the technology requirements of ship automation and burgeoning aviation broadband demand, still holds true. Lesser underperformers included Arrow Global, the UK debt collection business. Whilst the share price has dropped the company continues to make good progress and we continue to hold the shares.

On the positive side, by a considerable margin the biggest single contributor to performance was Wirecard, the German listed payment services company. Shares in this company, a longstanding investment, have been volatile in the past. Indeed, in the 2016 calendar year, the precipitous fall in the share price was a significant factor in explaining the portfolio's poor performance. However, we always concentrate on the fundamentals of any company. Wirecard continues its rapid yet steady progress. The next most important contributor was Grenke, the German leasing company. Like Wirecard it is a longstanding holding; and like Wirecard it is a beneficiary of the challenges faced by the mainstream banks. We believe that their demonstrably successful business model will continue to grow. Other important contributors to performance were Amadeus, the Spanish travel technology company, Deutsche Boerse, the German stock exchange, and Dassault Systemes, the French technology company. These three companies are all 'winners' from technology. Amadeus is deeply embedded in the fulfilment of airline ticketing; and it is extending its reach into the business of hotel reservation technology. Deutsche Boerse, notwithstanding the disappointment of its failed plan to merge with the London Stock Exchange, continues to benefit from the regulatory driven trend to 'on exchange' trading. Dassault Systemes is winning by building on its leadership in design and manufacturing software.

It is remarkable that so many contributors to the good performance, not least RELX and NovoNordisk, have been in the portfolio for many years, proof that winning business models can surprise positively over many years and that there can be rewards for backing companies for long periods. Portfolio turnover tends to be low. Our activity is largely driven as and when we recognise mistakes. The exception to this rule was the sale of Wirecard shares. The extraordinary rise in the share price led to an outsized weighting which we felt bound to reduce. Our decision to invest in Provident Financial has proved to be a significant error. Concerned by regulatory challenges, we sold the holding. The only other sale of any size was that of Ingenico. A holding since 2005, we decided that Ingenico was not best placed to capture value in growing global business of digital payments. Accordingly, we sold the shares. There were only two new purchases of any note, adidas and Intermediate Capital Group (ICG). There are various attractions to the adidas shares. One is that the company's successful engagement with opinion leaders and its responsiveness to consumer preferences has allowed it to build on its strong position. The consumer companies segment underperformed in part because they have struggled to develop successful and responsive strategies as adidas has done. ICG is a UK based private equity company specialised mainly in debt and mezzanine financing. Private equity is flourishing in Europe. ICG has strong niche positions which they can grow as the banks retreat from lines such as 'senior debt'. Most purchases reinforced existing positions. We bought more shares in Carnival, the world's largest owner and operator of cruise ships. Cruising is a growing business worldwide. It is extremely difficult to break into this business and therefore we believe that the incumbents, especially the industry leader, will create value.

Outlook

There are any number of potential threats to the investment backdrop. One comes from business itself. Stakeholder pressures risk subverting the very purpose of business. It is one of the reasons that we will continue to see capital drift from the publicly quoted to private equity. This threat is reflected to an extent in the attitudes towards business of the European (including the UK) political class, where there is some suspicion of free markets. A risk lies too with the threat of slower economic growth and rising interest rates. In such an eventuality refinancing of high debt levels would become more problematic. Our strategy for avoiding, as far as possible, these challenges and for capturing the rewards from the opportunities that will undoubtedly present themselves is to stick to our well-established strategy. We seek to identify companies with strong, differentiated attributes which they can monetise by meeting the demands of customers, while exploiting regulatory and technological changes. We are confident that good opportunities still abound.

Alexander Darwall

Fund Manager

Jupiter Asset Management Limited

Investment Adviser

28 September 2018

Investments as at 31 May 2018

		31 May 2018	31 May 2018			31 May 2017	31 May 2017
	Country of	Market value	Percentage			Market value	Percentage
Company	Listing	£'000	of Portfolio			£'000	of Portfolio
Wirecard	Germany	138,414		14.8	85,794		10.1
RELX	Netherlands	77,624		8.4	75,669		8.9
Novo Nordisk 'B'	Denmark	67,667		7.2	61,167		7.2
Carnival	United Kingdom	67,096		7.1	54,831		6.4
Amadeus IT Group	Spain	62,486		6.8	46,671		5.5
Deutsche Boerse	Germany	59,086		6.4	54,596		6.4
GRENKE	Germany	59,061		6.4	38,358		4.5
BioMerieux	France	44,842		4.8	36,968		4.3
Experian	Jersey	43,098		4.7	37,636		4.4
Grifols	Spain	36,365		3.9	32,797		3.8
Dassault Systemes	France	35,065		3.8	20,146		2.4
Ryanair Holdings	Ireland	32,512		3.5	26,705		3.1
Inmarsat	United Kingdom	31,049		3.4	61,195		7.2
adidas	Germany	23,657		2.6	-		-
Intermediate Capital Group	United Kingdom	20,934		2.3	-		-
Arrow Global Group	United Kingdom	19,422		2.1	22,234		2.6
Marine Harvest	Norway	16,934		1.8	12,601		1.5
Edenred	France	12,953		1.4	11,818		1.4
Umicore	Belgium	12,738		1.4	10,785		1.3
Genus	United Kingdom	11,677		1.3	3,322		0.4
Bayer	Germany	10,503		1.1	11,129		1.3
Fresenius	Germany	6,833		0.7	7,873		0.9
Wartsila OYJ Abp	Finland	6,748		0.7	-		-
doBank	Italy	5,940		0.6	-		-
KWS Saat	Germany	4,779		0.5	6,201		0.7
Jenoptik	Germany	4,323		0.5	-		-
Luxottica Group	Italy	3,344		0.4	11,576		1.3
ALK-Abello	Denmark	2,381		0.3	9,786		1.1
Chr Hansen Holding	Denmark	2,359		0.3	-		-
Ossur HF	Iceland	2,322		0.3	2,542		0.3
Axel Springer	Germany	1,632		0.2	-		-
Intrum	Sweden	1,483		0.2	14,483		1.7
Infineon Technologies	Germany	1,030		0.1	-		-
Assa Abloy 'B'	Sweden	400		-	-		-
Total		926,757	100.0

Cross Holdings in other Investment Companies

As at 31 May 2018 none of the Company's assets were invested in the securities of other listed closed-ended investment companies. It is the Company's stated policy that it will not invest in other closed-ended investment companies.

Strategic Review

The Strategic Report has been prepared in accordance with the Companies Act 2006 (Strategic Report and Directors' Report) Regulations 2013.

The Strategic Report seeks to provide shareholders with the relevant information to enable them to assess the performance of the Directors and the Company during the period under review.

Business and Status

During the year the Company carried on business as an investment trust with its principal activity being portfolio investment. The Company has been approved by HM Revenue & Customs as an investment trust subject to the Company continuing to meet the eligibility conditions of sections 1158 and 1159 of the Corporation Tax Act 2010 and the ongoing requirements for approved companies as detailed in Chapter 3 of Part 2 of the Investment Trust (Approved Company) (Tax) Regulations 2011. In the opinion of the Directors, the Company has conducted its affairs in the appropriate manner to retain its status as an investment trust.

The Company is an investment company within the meaning of section 833 of the Companies Act 2006.

The Company is not a close company within the meaning of the provisions of the Corporation Tax Act 2010 and has no employees.

The Company was incorporated in England & Wales on 28 September 1999 and started trading on 20 November 2000, immediately following the Company's launch.

Reviews of the Company's activities are included in the Chairman's Statement and Investment Adviser's Review above.

There has been no significant change in the activities of the Company during the year to 31 May 2018 and the Directors anticipate that the Company will continue to operate in the same manner during the current financial year.

Planned Life of the Company

The Articles of Association of the Company provide that at every third Annual General Meeting (AGM) an ordinary resolution shall be proposed that the Company shall continue in existence as an investment trust. If any such resolution is not passed at any of those meetings, the Directors shall, within 90 days of the date of the resolution, put forward to shareholders proposals (which may include proposals to wind up or reconstruct the Company) whereby shareholders are entitled to receive cash in respect of their shares equal as near as practicable to that to which they would be entitled on a liquidation of the Company at that time (and whether or not shareholders are offered other options under the proposals).

As a resolution to that effect was passed at the 2017 AGM, the next scheduled continuation vote will be at the 2020 AGM.

Shareholders should note that the valuations used to produce the financial statements on a going concern basis might not be appropriate if the Company were to be liquidated.

Investment Strategy

In order to achieve the objective of investing in securities of European companies and geographical sectors or areas which offer good prospects for capital growth, the Investment Adviser adopts a stock picking approach, in the belief that a thorough analysis and understanding of a company is the best way to identify long-term superior growth prospects.

Benchmark Index

The Company's benchmark index is the FTSE World Europe ex UK Total Return Index.

Dividend Policy

The Directors intend to manage the Company's affairs to achieve shareholder returns through capital growth rather than income. It is therefore not expected that the Company will pay a regular annual dividend. However, in order to qualify for approval by HM Revenue and Customs as an investment trust, no more than 15 per cent. of the income which the Company derives from ordinary shares or securities can be retained in respect of each accounting period. As such, the Company may declare a dividend from time to time.

Management

The Company has no employees and most of its day-to-day responsibilities are delegated to Jupiter Asset Management Limited, who act as the Company's Investment Adviser and Company Secretary.

J.P. Morgan Europe Limited acts as the Company's Depositary and the Company has entered into an outsourcing arrangement with J.P. Morgan Chase Bank N.A. for the provision of accounting and administration services.

Although Jupiter Asset Management Limited is named as the Company Secretary, J.P. Morgan Europe Limited provides administrative support to the Company Secretary as part of its formal mandate to provide broader fund administration services to the Company.

Internal Controls and Risk Management Systems

The Board has established an ongoing process for identifying, evaluating and managing significant risks faced by the Company.

Viability Statement

In accordance with provision C.2.2. of the UK Corporate Governance Code as issued by the Financial Reporting Council in September 2015, the Board has assessed the prospects of the Company over the rolling three years. The Company's investment objective is to achieve long-term capital growth and the Board regards the Company as a long-term investment. As part of its assessment, the Board has noted that shareholders will be required to vote on the continuation of the Company at the 2020 AGM. As at the year end, the Board is not aware of any events or conditions which would suggest the continuation vote will not be passed.  Three years is also considered to be a reasonable period   for investment in equities and is appropriate for the composition of the Company's portfolio. The Board has considered the Company's business model including its investment objective and investment policy as well as the principal risks and uncertainties that may affect the Company as detailed below.

The Board has noted that:

·      The Company holds a liquid portfolio invested predominantly in listed equities;

·      The Company maintains a relatively low level of gearing;

·      The Company's ongoing charges and operational expenses are well covered by the expected levels of return and revenue;

·      The Company has maintained a consistent performance and share price discount to NAV;

·      European equities remain an attractive opportunity for investors; and

·      No significant increase to ongoing charges or operational expenses is anticipated.

The Board has also considered the Company's prospects over the rolling three years, its principal risks, its level of gearing, the predicted demand for the Company's shares as well as market outlook, both for equity shares and investment trusts.

The Board has therefore concluded that there is a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the next three years.

Gearing

'Gearing' may be defined as the ratio of a company's debt, less cash held, compared to its equity capital, expressed as a percentage. The effect of gearing is that where the value of the investment portfolio increases, all the increase accrues to the shareholders whereas when the value falls, the shareholders suffer the whole of the reduction. Holders of the Company's debt are not affected by such increases or reductions, provided that the portfolio value remains sufficient to cover the debt.

In order to improve the potential for capital returns to shareholders the Company had access to a flexible loan facility with Scotiabank Europe PLC for amounts up to £135 million. During the accounting year, the existing facility of £125 million was increased to £135 million on 14 September 2017.

On 14 September 2018 the Company's existing £135 million multi-currency revolving loan facility was due to expire. Accordingly, on 14 September 2018 the Board agreed to renew the facility at £100 million.

The Directors consider it a priority that the Company's level of gearing should be maintained at appropriate levels with sufficient flexibility to enable the Company to adapt at short notice to changes in market conditions.

The Board has not set any additional limits or restrictions on the Company's new £100 million loan facility with Scotiabank Europe PLC. The Board regularly reviews the Company's level of gearing.

Key Performance Indicators

At the quarterly board meetings the Directors consider a number of performance indicators to help assess the Company's success in achieving its objectives. The key performance indicators used to measure the performance of the Company over time are as follows:

•     Net Asset Value changes over time

•     Ordinary share price movement

•     A comparison of the absolute and relative performance of the Ordinary share price to Net Asset Value and the Company's Benchmark Index

•     Discount over varying periods

•     Peer Group comparative performance.

A history of the Net Asset Value and benchmark is shown above under the heading Performance Since Launch and in the monthly factsheets which can be viewed on the Company's section of the Investment Adviser's website www.jupiteram.com/JEO and which are available on request from the Company Secretary.

Peer Group Performance

There were 8 investment trusts in the Europe sector as at 31 May 2018. The Board monitors the Company's performance in relation to both the sector as a whole and the companies within the sector which the Board considers to be its peer group.

As at 31 May 2018, of those companies within the Europe sector, the Company was ranked 2nd over one year, 1st over three and 1st over five years respectively by NAV performance. The Company was ranked 2nd in the peer group in terms of discount to NAV as at 31 May 2018 (source: JP Morgan Cazenove).

Capital Gains Tax Information

The closing middle market price of Ordinary shares on the first date of dealing (20 November 2000) for Capital Gains Tax purposes was 101.5p.

Premium/Discount to Net Asset Value

The Directors review the level of the discount or premium between the middle market price of the Company's Ordinary shares and their Net Asset Value on a regular basis and take the opportunity to issue shares when there is sufficient demand at not less than NAV.

The Directors have powers granted to them at the last annual general meeting to purchase Ordinary shares and hold them in treasury or for cancellation as a method of controlling the discount to Net Asset Value and enhancing shareholder value.

No Ordinary shares were bought back during the year.

Under the Listing Rules, the maximum price that may currently be paid by the Company on the repurchase of any Ordinary shares is 105 per cent. of the average of the middle market quotations for the Ordinary shares for the five business days immediately preceding the date of repurchase. The minimum price will be the nominal value of the Ordinary shares.

The Board is proposing that its authority to repurchase up to approximately 14.99 per cent. of its issued share capital should be renewed at the Annual General Meeting. The new authority to repurchase will last until the conclusion of the Annual General Meeting of the Company in 2019 (unless renewed earlier). Any repurchase made will be at the discretion of the Board in light of prevailing market conditions and within guidelines set from time to time by the Board, the Companies Act, the Listing Rules and Model Code.

Treasury Shares

In accordance with the relevant provisions of the Companies Act 2006 any Ordinary shares repurchased, pursuant to the above authority, may be held in treasury. These Ordinary shares may subsequently be cancelled or sold for cash. This would give the Company the ability to reissue shares quickly and cost effectively and provide the Company with additional flexibility in the management of its capital. The Company may hold in treasury any of its Ordinary shares that it purchases pursuant to the share buyback authority granted by shareholders. At present there are no shares held in treasury.

Principal Risks and Uncertainties

The principal risk factors that may affect the Company and its business can be divided into the following areas:

Investment Strategy and Share Price Movements - The Company is exposed to the effect of variations in the price of its investments. A fall in the value of its portfolio will have an adverse effect on shareholders' funds. The aim of the Board is to favour capital growth wherever possible, but it is inevitable that from time to time losses may be incurred. The Board reviews the Company's investment strategy and the risk of adverse share price movements at its quarterly board meetings taking into account the economic climate, market conditions and other factors that may have an effect on the sectors in which the Company invests.

Foreign Currency Movements - The Company has exposure to foreign currency through its investments. The Board considers carefully factors which may affect the foreign currency in which the Company has an exposure at its quarterly board meetings taking into account the economic and political climate of various regions and the prospects for sterling.

Interest Rates - The Company has exposure to cash which generates interest through interest bearing accounts. The Board is mindful of interest rates when setting limits on the Company's exposure to cash.

Liquidity Risk - This risk can be viewed both as the liquidity of the securities in which the Company invests and the liquidity of the Company's shares. The Company may invest in securities that have a very limited market which will affect the ability of the Company's Investment Adviser to dispose of securities when he no longer feels they offer the potential for future returns. Likewise the Company's shares may experience liquidity problems when shareholders are unable to realise their investment in the Company because there is a lack of demand for the Company's shares. The Board is mindful of the liquidity in the Company's shares. In addition, the Board seeks the advice of the Company's brokers, Cenkos, who give advice on ways in which the Board can influence the liquidity in the Company's shares. The Company monitors performance to ensure it is able to meet the financial objectives of the loan repayment.

Gearing Risk - The Company's gearing can impact the Company's performance by accelerating the decline in value of the Company's net assets at a time when the Company's portfolio is declining. Conversely gearing can have the effect of accelerating the increase in the value of the Company's net assets at a time when the Company's portfolio is rising. The Company's level of gearing is under constant review by the Board who take into account the economic environment and market conditions when reviewing the level.

Discount to Net Asset Value - A discount in the price at which the Company's shares trade to Net Asset Value would mean that shareholders would be unable to realise the true underlying value of their investment. As a means of controlling the discount to Net Asset Value the Board has established a discount control policy which is under constant review as market conditions change.

Regulatory Risk - The Company operates in a complex regulatory environment and faces a number of regulatory risks. A breach of section 1158 of the Corporation Tax Act 2010 could result in the Company being subject to tax on capital gains in the portfolio. Breaches of other regulations, such as the UKLA Listing Rules, could lead to a number of detrimental outcomes and reputational damage. Breaches of controls by service providers could also lead to reputational damage or loss. The Board relies on the services of its Company Secretary, Jupiter Asset Management Limited, and its professional advisers to ensure compliance with, amongst other regulations, the Companies Act 2006, the UKLA Listing Rules and the Alternative Investment Fund Managers Directive.

Loss of Key Personnel - The day-to-day management of the Company has been delegated to the Investment Adviser. Loss of the Investment Adviser's key staff members could affect investment return. The Board is aware that Jupiter Asset Management Limited recognises the importance of its employees to the success of its business. Its remuneration policy is designed to be market competitive in order to motivate and retain staff and succession planning is regularly reviewed. The Board also believes that suitable alternative experienced personnel could be employed to manage the Company's portfolio in the event of an emergency.

Operational - Failure of the Investment Adviser's core accounting systems, or a disastrous disruption to its business, could lead to an inability to provide accurate reporting and monitoring. The Investment Adviser is contractually obliged to ensure that its conduct of business conforms to applicable laws and regulations.

Custody - The Board receives quarterly reports from the Depositary confirming safe custody of the Company's assets and cash and holdings are reconciled to the Custodian's records. The Depositary's internal controls reports are reviewed by the Investment Adviser and the Company's Directors and concerns are discussed as and when they may occur.

The Depositary is specifically liable for loss of any of the Company's securities or cash held in custody.

Financial - Inadequate financial controls could result in misappropriation of assets, loss of income and debtor receipts and inaccurate reporting of Net Asset Value per share. The Board annually reviews the Investment Adviser's statements on its internal controls and procedures in addition to any financial reporting by the Company.

Derivatives - The Company invests in derivatives from time to time. Derivatives may be a riskier investment than equities as they can exaggerate the return that can be achieved compared to investing directly in equities. The Board has set limits on the amount of exposure the Company has to derivatives and it reviews these limits at its quarterly board meetings. The Company did not invest in derivatives during the year.

In accordance with the AIC and the UK Corporate Governance Code, the Directors have carried out a review of the effectiveness of the system of internal control as it has operated over the year and up to the date of approval of the report and accounts.

Social and Environmental Matters

The Investment Adviser considers various factors when evaluating potential investments. While an investee company's policy towards the environment and social responsibility, including with regard to human rights, is considered as part of the overall assessment of risk and suitability for the portfolio, the Investment Adviser does not necessarily decide to, or not to, make an investment on environmental and social grounds alone.

Global Greenhouse Gas Emissions

All of the Company's activities are outsourced to professional third parties. As such it does not have any physical assets, property, employees or operations of its own and does not generate any greenhouse gas or other emissions.

The Company has no greenhouse gas emissions to report from its operations as its day-to-day management and administration functions have been outsourced to third parties and it neither owns physical assets, property nor has employees of its own. It therefore does not have responsibility for any other emissions producing sources under the Companies Act 2006 (Strategic Report and Directors' Report) Regulations 2013.

Board Diversity

It is seen as a prerequisite that each member of the Board must have the skills, experience and character that will enable each Director to contribute individually, and as part of the Board team, to the effectiveness of the Board and the success of the Company. Subject to that overriding principle, diversity of experience and approach, including gender diversity, amongst Board members is of great value, and it is the Board's policy to give careful consideration to issues of overall Board balance and diversity in appointing new directors.

The Board currently comprises four male directors and one female director.

For and on behalf of the Board

Andrew Sutch

Chairman

28 September 2018

Statement of Comprehensive Income for the year ended 31 May 2018

		31 May 2018			31 May 2017
	Revenue	Capital	Total	Revenue	Capital	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Gain on investments at fair value through profit or loss	-	89,236	89,236	-	185,664	185,664
Foreign exchange loss on loan	-	(509)	(509)	-	(7,140)	(7,140)
Other exchange loss	-	(685)	(685)	-	(44)	(44)
Income	16,106	-	16,106	16,544	-	16,544
Other Income	122	-	122	-	-	-
Total income	16,228	88,042	104,270	16,544	178,480	195,024
Investment management fee	(6,705)	-	(6,705)	(6,020)	-	(6,020)
Investment performance fee	-	(13,084)	(13,084)	-	(23)	(23)
Other expenses	(701)	-	(701)	(645)	(1)	(646)
Total expenses	(7,406)	(13,084)	(20,490)	(6,665)	(24)	(6,689)
Net return before finance costs and taxation	8,822	74,958	83,780	9,879	178,456	188,335
Finance costs	(933)	-	(933)	(937)	-	(937)
Return on ordinary activities before taxation	7,889	74,958	82,847	8,942	178,456	187,398
Taxation	(1,362)	-	(1,362)	(177)	-	(177)
Net return after taxation*	6,527	74,958	81,485	8,756	178,456	187,221
Return per Ordinary share	5.84p	67.13p	72.97p	7.86p	159.94p	167.80p

*There is no other comprehensive income and therefore 'Net return after taxation' is the total comprehensive income for the period.

The total column of this statement is the income statement of the Company, prepared in accordance with IFRS. The supplementary revenue return and capital return columns are both prepared under guidance produced by the Association of Investment Companies (AIC). All items in the above statement derive from continuing operations.

No operations were acquired or discontinued during the year.

Statement of Financial Position as at 31 May 2018

	2018	2017
	£'000	£'000
Non current assets
Investments held at fair value through profit or loss	926,757	852,763
Current assets Other receivables	4,427	7,280
Cash and cash equivalents	17,255	55,343
	21,682	62,623
Total assets	948,439	915,386
Current liabilities Other payables	(75,244)	(120,374)
Total assets less current liabilities	873,195	795,012
Capital and reserves
Called up share capital	1,121	1,116
Share premium	197,506	193,561
Special reserve	33,687	33,687
Capital redemption reserve	45	45
Retained earnings	640,836	566,603
Total equity shareholders' funds	873,195	795,012
Net Asset Value per Ordinary share	778.94p	712.53p

Approved by the Board of Directors and authorised for issue on 28 September 2018.

Andrew Sutch

Chairman

Company Registration Number 4056870

Statement of Changes in Equity for the year ended 31 May 2018

For the year ended	Share Capital	Share Premium	Special Reserve	Capital Redemption Reserve	Retained Earnings	Total
31 May 2018	£'000	£'000	£'000	£'000	£'000	£'000
1 June 2017	1,116	193,561	33,687	45	566,603	795,012
Net return after taxation	-	-	-	-	81,485	81,485
Ordinary share issue	5	3,945	-	-	-	3,950
Dividends declared and paid**	-	-	-	-	(7,252)	(7,252)
Balance at 31 May 2018	1,121	197,506	33,687	45	640,836	873,195

For the year ended	Share Capital	Share Premium	Special Reserve	Capital Redemption Reserve	Retained Earnings	Total
31 May 2017	£'000	£'000	£'000	£'000	£'000	£'000
1 June 2016	1,116	193,555	33,687	45	385,519	613,922
Net return after taxation	-	-	-	-	187,221	187,221
Refund of share issue costs*	-	6	-	-	-	6
Dividends declared and paid**	-	-	-	-	(6,137)	(6,137)
Balance at 31 May 2017	1,116	193,561	33,687	45	566,603	795,012

* This represents a prior year refund from the Company's registrar. No shares were issued during the accounting year.

 **Dividends paid during the period were paid out of revenue reserves.

Cash Flow Statement for the year ended 31 May 2018

	2018	2017
	£'000	£'000
Cash flows from operating activities
Dividends received (gross)	17,394	15,776
Deposit interest received	122	-
Investment management fee paid	(6,642)	(5,651)
Investment performance fee paid	-	(5,325)
Other cash expenses	(654)	(596)
Net cash inflow from operating activities before taxation and interest	10,220	4,204
Interest paid	(936)	(928)
Overseas tax incurred	(1,498)	(698)
Net cash inflow from operating activities	7,786	2,578
Cash flows from investing activities
Purchases of investments	(135,755)	(231,190)
Sales of investments	152,275	270,215
Net cash inflow from investing activities	16,520	39,025
Cash flows from financing activities
Ordinary shares issued	3,950	6*
Equity dividends paid	(7,252)	(6,137)
Net (repayment)/drawdown of loan	(58,407)	13,824
Net cash inflow from financing activities	(61,709)	7,693
(Decrease)/Increase in cash	(37,403)	49,296
Change in cash and cash equivalents
Cash and cash equivalents at start of year	55,343	6,091
Realised loss on foreign currency	(685)	(44)
Cash and cash equivalents at end of year	17,255	55,343

*This represents a prior year refund from the Company's registrar. No shares were issued during the accounting year.

Notes to the Accounts for the year ended 31 May 2018

1.     Accounting policies

The Accounts comprise the financial results of the Company for the year to 31 May 2018. The functional and reporting currency of the Company is pounds sterling because that is the currency of the prime economic environment in which the Company operates. The Accounts were authorised for issue in accordance with a resolution of the directors on 28 September 2018. All values are rounded to the nearest thousand pounds (£'000) except where indicated.

The Accounts have been prepared in accordance with International Financial Reporting Standards (IFRS), which comprise standards and interpretations approved by the International Accounting Standards Board (IASB) and International Accounting Standards Committee (IASC), as adopted by the European Union (EU).

Where presentational guidance set out in the Statement of Recommended Practice (SORP) for Investment Trusts issued by the Association of Investment Companies (AIC) in November 2015 is consistent with the requirements of IFRS, the directors have sought to prepare the financial statements on a basis compliant with the recommendations of the SORP.

The Board continues to adopt the going concern basis in the preparation of the financial statements.

(a)    Revenue recognition

Dividends from investments are recognised when the investment is quoted ex-dividend on or before the date of the Statement of Financial Position.

Dividends receivable from equity shares are taken to the revenue return column of the Statement of Comprehensive Income.

Deposit and other interest receivable are accounted for on an accruals basis. These are classified within operating activities in the cash flow statement.

Special dividends are reviewed on a case by case basis to determine if the dividend is to be treated as revenue or capital.

(b)    Presentation of Statement of Comprehensive Income

In order to better reflect the activities of an investment trust company and in accordance with guidance issued by the Association of Investment Companies (AIC), supplementary information which analyses the Statement of Comprehensive Income between items of a revenue and capital nature has been presented alongside the statement. In accordance with the Company's Articles of Association, net capital returns may not be distributed by way of dividend.

(c)    Basis of valuation of investments

Investments are recognised and derecognised on a trade date where a purchase or sale of an investment is under contract whose terms require delivery of the investment within the timeframe established by the market concerned, and are initially measured at the fair value, being the consideration given.

The investments are designated as fair value through profit or loss on initial recognition as this is consistent with the company's documented investment strategy.

All investments are classified as held at fair value through profit or loss. All investments are measured at fair value with changes in their fair value recognised in the Statement of Comprehensive Income in the period in which they arise. The fair value of listed investments is based on their quoted bid price at the reporting date without any deduction for estimated future selling costs.

Foreign exchange gains and losses on fair value through profit or loss investments are included within the changes in the fair value of the investment.

For investments that are not actively traded and/or where active stock exchange quoted bid prices are not available, fair value is determined by reference to a variety of valuation techniques. These techniques may draw, without limitation, on one or more of: the latest arm's length traded prices for the instrument concerned; financial modelling based on other observable market data; independent broker research; or the published accounts relating to the issuer of the investment concerned.

(d)    Cash and cash equivalents

Cash comprises cash in hand and demand deposits. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and that are subject to insignificant risks of changes in value.

(e)    Foreign currencies

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing on the dates of the transactions. At the date of each Statement of Financial Position, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on that date. Non-monetary assets and liabilities carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date when the fair value was determined. Gains and losses arising on retranslation are included in the Statement of Comprehensive Income with the revenue or capital column depending on the nature of the underlying item.

(f)     Borrowing and finance costs

Interest-bearing bank loans and overdrafts are recorded at the proceeds received, net of direct issue costs and subsequently measured at amortised cost. Finance charges, including premiums payable on settlement or redemption and direct issue costs, are accounted for on an accruals basis in the Statement of Comprehensive Income using the effective interest method and are added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise.

Finance costs are recognised in the Statement of Comprehensive Income in the period in which they are incurred. All finance costs are directly charged to the revenue column of the Statement of Comprehensive Income.

(g)    Expenses

Expenses are accounted for on an accruals basis. Management fees, administration and other expenses are charged fully to the revenue column of the Statement of Comprehensive Income. That part of any investment performance fee which is deemed by the Directors to relate to the capital outperformance of the Company's investments will be charged to capital and that part relating to revenue outperformance will be charged to revenue. Expenses which are incidental to the purchase or sale of an investment are charged to capital, along with any foreign exchange gains and losses.

(h)  Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the Statement of Comprehensive Income because it excludes items of income or expense that are taxable or deductible in other periods and it further excludes items that are never taxable or deductible. The Company's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the date of the Statement of Financial Position.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which deductible temporary differences can be utilised.

Investment trusts which have approval under Section 1158 of the Corporation Tax Act 2010 are not liable for taxation of capital gains.

Irrecoverable VAT is included in the expense on which it has been suffered. Recoverable VAT is calculated using the partial exemption method based on the proportion of zero rated supplies to total supplies.

(i)   Ongoing Charges Figure

The Ongoing Charges Figure (OCF) is calculated as the ratio of the total ongoing charges to the average net asset value of the Company over the year. The OCF is made up of the Investment Management fee and other operating costs deducted from the Company during the year, except for those payments that are explicitly excluded (performance fees, finance costs).

(j)   Accounting developments

At the date of authorisation of these financial statements, the following Standards and Interpretations were in issue. They are not yet mandatory, but are available for early adoption. They are not expected to have a material impact:

International Accounting Standards (IAS/IFRS's)

IFRS 9 Financial Instruments

IFRS 9 is not expected to impact the company significantly as the investment portfolio will continue to be held at fair value through profit or loss and other assets and liabilities will continue to be held at amortised cost. In addition, the company does not expect to incur a significant impairment allowance on the adoption of the expected credit loss model due to the nature and size of assets held at amortised cost.

Effective date: 1 January 2018

Amendments to IFRS 9 - Prepayment Features with Negative Compensation.

Effective date: 1 January 2019

IFRS 15 Revenue from Contracts with Customers

IFRS 15 will not have significant as the Company does not have significant income that will be accounted for under IFRS 15.

Effective date: 1 January 2018

The Directors anticipate that the adoption of the above standards and interpretations in future periods will have no material impact on the financial statements of the Company. The Company intends to adopt the standards in the reporting period when they become effective.

2.   Income

			Year ended	Year ended
			31 May	31 May
			2018	2017
			£'000	£'000
Income from investments
Dividends from United Kingdom companies			4,932	6,173
Dividends from overseas companies			11,174	10,371
			16,106	16,544
Other income
Deposit interest			122	-
			16,228	16,544

3.   Earnings per Ordinary share

The earnings per Ordinary share figure is based on the net return for the year of £81,485,000 (2017: Return £187,221,000), and on 111,660,399 (2017: 111,575,331) Ordinary shares, being the weighted average number of Ordinary shares in issue during the year.

The return per Ordinary share figure detailed above can be further analysed between revenue and capital, as below.

	Year ended 31 May 2018	Year ended 31 May 2017
	£'000	£'000
Net revenue return	6,527	8,765
Net capital return	74,958	178,456
Net total return	81,485	187,221
Weighted average number of Ordinary shares in issue during the year	111,660,399	111,575,331
Revenue return per Ordinary share	5.84p	7.86p
Capital return per Ordinary share	67.13p	159.94p
Return per Ordinary share	72.97p	167.80p

4.  Net Asset Value per Ordinary share

The Net Asset Value per Ordinary share is based on the net assets attributable to the equity shareholders of £873,195,000 (2017: £795,012,000) and on 112,100,331 (2017: 111,575,331) Ordinary shares, being the number of Ordinary shares in issue at the year end.

5.  Related parties

Jupiter Unit Trust Managers Limited ('JUTM'), the Alternative Investment Fund Manager, is a company within the same group as Jupiter Asset Management Limited, the Investment Adviser. JUTM receives an investment management fee as set out below.

JUTM is contracted to provide investment management services to the Company (subject to termination by not less than twelve months' notice by either party) for an annual fee of 0.75 per cent. of the net assets of the Company after deduction of the value of any Jupiter managed investments, payable quarterly in arrears.

The Management fee payable to JUTM for the period 1 June 2017 to 31 May 2018 was £6,705,000 (2017: £6,020,000) with £1,775,000 outstanding at year end (31 May 2017: £1,712,000).

JUTM is also entitled to an investment performance fee which is based on the out-performance of the Net Asset Value per Ordinary share over the total return on the Benchmark Index, the FTSE World Europe ex UK Total Return Index in an accounting period. Any performance fee payable will equal 15 per cent of the amount by which the increase in the Net Asset Value per Ordinary share (plus any dividends per Ordinary share paid or payable and any accrual for unpaid performance fees for the period) exceeds the higher of (a) the Net Asset Value per Ordinary share on the last business day of the previous accounting period; (b) the Net Asset Value per Ordinary share on the last day of a period in respect of which a performance fee was last paid: and (c) 100p. In each case the values of (a), (b) and (c) are increased by the percentage by which the total return of the Benchmark Index increases or decreases during the calculation period. The aggregate of all fees payable to the Investment Adviser in respect of one accounting period is limited to 4.99 per cent. of the Net Assets of the Company. The performance fee payable for the year ended 31 May 2018 was £13,084,000 (2017: nil).

Fees payable to the Directors for the year ended 31 May 2018 were £148,000 (2017: £121,000) with £29,000 outstanding at year end (31 May 2017: £20,000).

6.  Contingent liabilities and capital commitments

There were no contingent liabilities or capital commitments outstanding as at 31 May 2018 (2017: nil).

7.  Post balance sheet event

Since the year end 575,000 additional Ordinary shares have been issued.

8.   Annual Results

This Annual Results announcement does not constitute the Company's statutory accounts for the years ended 31 May 2018 and 31 May 2017 but is derived from those accounts. Statutory accounts for the year ended 31 May 2017 have been delivered to the Registrar of Companies. The statutory accounts for the year ended 31 May 2018 and the year ended 31 May 2017 both received an audit report which was unqualified and did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying the report and did not include statements under Section 498 of the Companies Act 2006 respectively. The statutory accounts for the year ended 31 May 2018 have not yet been delivered to the Registrar of Companies and will be delivered following the Annual General Meeting.

The Annual General Meeting of the Company will be held on Wednesday, 7 November 2018.

A copy of the Annual Report & Accounts will shortly be submitted to the National Storage Mechanism and will be available for inspection at www.morningstar.co.uk/uk/NSM.

The Annual Report & Accounts will also be available for download from the Company's section of Jupiter Asset Management's website www.jupiteram.com/JEO

Hard copies of the Annual Report & Accounts will also be available upon request from the registered office of the Company at The Zig Zag Building, 70 Victoria Street, London SW1E 6SQ

For further information, please contact:

Richard Pavry

Head of Investment Trusts

Jupiter Asset Management Limited, Company Secretary

[e-mail]

020 3817 1496

28 September 2018

[END]

 

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