Final Results

JUPITER EUROPEAN OPPORTUNITIES TRUST PLC Preliminary Announcement CHAIRMAN'S STATEMENT After two successive years in each of which the Net Asset Value of your Company's shares rose by more than 25 per cent, the increase in the year under review was less dramatic at 2.7 per cent. However, the Company's performance once again beat that of our benchmark, the FTSE World Europe ex UK Total Return Index, which recorded a small fall. Over the year, a powerful market sell-off was succeeded by a strong rally before prices fell away again. Given such wild fluctuations in equity markets, it is perhaps surprising that your Company's Net Asset Value and benchmark showed relatively little overall change. Subsequent to our financial year-end, both the Net Asset Value and the benchmark have declined sharply. As at 12 August 2008, the latest date before these accounts went to press, the Net Asset Value had fallen back to 201.14p, a fall since 31 May 2008 of 12.8 per cent compared with a 10.1 per cent decline for the benchmark Index. At that same date the discount-the difference between the Net Asset Value per share and the middle market price-stood at 9.5 per cent. Over the year under review the monthly discount has ranged from 8.7 per cent. to a premium of 1.8 per cent. While we cannot predict or control stock markets or share prices, we seek to invest in well managed businesses that continue to improve absolute and relative market positions, especially in difficult times. In doing so, we expect the Company's own rating to be the first to turn with the tide and to stay at the top of it when it rises again. As reported last year, your Manager successfully placed a further 600,000 newly- created shares with institutional investors at a premium to the then net asset value. This raised new money for the Company without diluting the interests of existing shareholders. Both your Investment Manager, Jupiter Asset Management, and Portfolio Manager, Alex Darwall, have worked tirelessly to create new buyers for your Company's shares and to keep existing investors fully informed about your Company's progress. In difficult markets, such as those we have recently encountered, such activity is vital. I commend your Manager's Report which gives a full account of individual sectors and certain portfolio investments. Continuation of the Company as an Investment Trust Although the life of the Company is presently unlimited, the Articles require the Board to procure that at the forthcoming annual general meeting of the Company in 2008, and at every third annual general meeting thereafter an ordinary resolution be proposed to the effect that the Company shall continue in existence as an investment trust. If, at any such meeting, such resolution is not passed, the Board is required, within 90 days of such a meeting, to give notice of a general meeting of the Company to consider proposals for the reconstruction or winding-up of the Company. A Resolution will therefore be proposed at the forthcoming Annual General Meeting for the continuation of your Company as an investment trust. We hope and recommend that all Shareholders will exercise their votes in favour of this resolution. Renewal of Share Buy Back Powers No shares were bought back by the Company for treasury or cancellation during the year under review. Nevertheless, your Board is also seeking to renew its powers to buy back shares for cancellation or treasury at the AGM. This facility can be a useful tool for enhancing the Net Asset Value of the Ordinary shares. The repurchase of shares will only be undertaken after consideration of the interests of the Company's shareholders at the point at which the opportunity for buybacks arises. VAT Recovery Your Board and Investment Manager have lodged a protective claim with H.M. Revenue & Customs for recovery of Value Added Tax paid on all management and performance fees paid from the launch of your Company up to the quarter which ended on 31 August 2007. At the present time it is not possible to quantify the exact amount which may be recovered or when this would be receivable but the total is expected to be not less than 1.5 pence per ordinary share. Approximately 80 per cent. of any recovery of VAT will be treated as distributable revenues, with the balance treated as a capital receipt which will be reflected in the Company's published Net Asset Values when agreement has been reached on the amounts involved. This apportionment reflects the basis on which management and performance fees have been charged to the Company since launch. Gearing During the year under review your Company's borrowing facilities were renegotiated on advantageous terms on a bilateral basis with Lloyds TSB and the Bank of Ireland. As of 12 August 2008 the Company's gearing (being the Company's total borrowings expressed as a percentage of its total assets) stood at 25 per cent. It might seem perverse to use borrowed money at a time when markets have been falling. Gearing, as we all know, works both ways. But in our experience, based principally on the 1972-74 bear market which those who lived through it will never forget, there is nothing worse than investment trusts scrambling to sell shares into a falling market in order to cut borrowing levels. Those which did so at the back end of 1974 took a long time to recover. The market subsequently turned and rose so sharply that it became as difficult to buy shares 'in size' as it had been to sell them but a short time before. We believe that your Company's portfolio consists of holdings in companies with proven management, global reach and successful business models. At times of great uncertainty all shares fall in value. Just as a rising tide lifts all boats, so when the waters recede, all are stranded. The key is to avoid those boats which subsequently turn out to have been holed and therefore fail to participate when better times return. Companies Act 2006 and New Articles of Association At the forthcoming AGM it is proposed that the Company should adopt new Articles of Association in substitution for the current Articles of Association primarily in order to comply with those provisions of the Companies Act 2006 (the `Act') which have been brought into effect already and those that will be effective from 1 October 2008. The new Act is being introduced in stages and is expected to be fully enacted by 1 October 2009. Outlook A year ago I was unwise enough to opine that the market volatility witnessed at the time was "hardly the backdrop for a full-blown bear market". Well, we all make mistakes, although the overall change in values over the year under review was, as already noted, small in terms of market levels. But the fear factor has subsequently reasserted itself with a vengeance, and it is hard to see any turnaround in sentiment for some time. Ultimately good management will out. We believe strongly that our equity portfolio, whose constituent companies are not overly dependent on raw material prices, stock market levels or political whim but enjoy market leadership in sectors with global growth potential, will prove its worth. H.M. Priestley Chairman 19 August 2008 MANAGER'S REVIEW The Net Asset Value of the Company's Ordinary shares rose by 2.7 per cent. in the twelve months to 31 May 2008. During the year under review we increased the Company's drawn down borrowings by @7.1m to €72.8m. This represents 23.1 per cent. of the Company's total assets. The Company's trading subsidiary, JEOT Securities Limited, made a pre tax profit of £356,000 during the period under review. The FTSE World All World (Total Return) index fell by 1.9 per cent. (in sterling terms) during the twelve month period under review. The Company's benchmark, the FTSE World Europe ex UK Total Return Index, fell by 0.1 per cent.. This `European conundrum' (where equities have outperformed but economic growth has underperformed in Europe by comparison to the world) is explained largely by the high proportion of earnings from global emerging markets. While this globalisation proved positive for market performance, the credit crisis and inflation worries have nevertheless damaged equities. There are two main reasons for the Company's modest outperformance in this reporting period. First, our investments typically have more than average extra- European earnings and are thereby exposed to some better demand. Second, we had less exposure to the credit bubble. This meant that our companies enjoyed more resilient demand and typically lost less money in the credit crisis. The worst performing sectors in the Company's benchmark index were finance, electronics and retail. Your Company was significantly underweight in these sectors. The best performing sectors were `Process industries', energy, minerals and utilities. In these sectors the portfolio was moderately underweight. As ever, performance is better explained by individual stocks. Those that contributed most positively to your Company's performance were Syngenta (a beneficiary of the `soft' commodity boom), Numico (the subject of a takeover), NovoNordisk (the world's leading insulin producer) and Nokian Tyres (the most profitable tyre company in the world with significant exposure to Russia and Eastern Europe). All these exceeded earnings expectations. At the other end of the scale, Euler Hermes (the credit insurer), Fimalac (which owns the world's third largest credit rating agency), Halfords (the British retailer) and Neopost (the manufacturer of franking machines) were the main detractors from performance. With the exception of Halfords, these companies reported disappointing earnings. The most significant sale in the Company's investment portfolio was that of Numico, following a bid approach from Danone. Wellstream, the British based oil equipment company, was sold on valuation grounds. Luxottica, Vallourec, Air France and Royal Caribbean Cruises were sold for the same reason. Carter & Carter, Sandvik, Husqvarna and Fimalac were all sold following disappointing results. Positions in NovoNordisk, Novozymes, and Nokian Tyres were reduced for portfolio management reasons. The entire Carphone Warehouse position was sold on valuation grounds. However, a significant new position was taken (after a period of several months) at a lower price than the entire earlier sale. This was because new growth opportunities were identified. The position in Geophysique (seismic testing) was increased as it should benefit from the oil boom. The holding in Neopost was increased after a sharp fall in the share price: the fundamentals remain strong. We increased investments in two financials, Dexia (a Franco Belgian bank) and Euler Hermes (the credit insurer). Both were considered to be strong in niche areas, avoiding the mainstream credit problems. However, poor management has led to them being impacted to a degree by the credit crisis. We increased holdings in oil service companies Fugro and Vopak. Both provide examples of how we can benefit from rising oil prices. Other new investments included Fresenius SE (the German healthcare manufacturer and operator) and Bayer which we believe is a beneficiary of the strong agrochemicals market. Two other fresh investments deserve comment: Tomra is a Norwegian listed recycling company which is progressing well in Europe and North America. K+S is the leading producer of potash in Europe. It is benefiting significantly (albeit indirectly) from strong agricultural demand in India and China. Investment Outlook The consumer credit crisis and inchoate increases in inflation represent formidable challenges to investment success at present. Moreover, in the near term, with market sentiment clearly negative, our decision to maintain high levels of gearing (a mark of medium term confidence) is temporarily hindering returns. These challenges are, however, manageable. At the global level there are two important factors. The first is that there is no slide back into protectionism. For as long as world trade increases, productivity gains will flow ensuring wealth creation. Second, the continuing willingness of those countries with large surpluses to spend money is vital to near term economic prospects. On both counts there are grounds for optimism. We invest in companies that are `winners' through the business cycle. Current economic conditions provide an excellent test of this approach. Our confidence is underpinned by three factors which determine the success of our stock picking. Our companies have strong business models that can mitigate the impact of lower growth or recession, good exposure to faster growing economies and strong balance sheets. Alex Darwall Jupiter Asset Management Limited 19 August 2008 CONSOLIDATED INCOME STATEMENT for the year ended 31 May 2008 2008 2007 Revenue Capital Revenue Capital return return Total return return Total £'000 £'000 £'000 £'000 £'000 £'000 Gains on investments at fair value through profit or loss - 11,596 11,596 - 46,239 46,239 Foreign exchange losses on loans - (6,868) (6,868) - (45) (45) Other exchange gain / (loss) - 73 73 - (94) (94) ______ _____ _____ ______ _____ _____ - 4,801 4,801 - 46,100 46,100 Investment income 5,368 - 5,368 3,760 - 3,760 Dealing profits of subsidiary 162 - 162 1,592 - 1,592 Foreign exchange loss by subsidiary (12) - (12) (8) (8) ______ _____ _____ ______ _____ _____ Total income 5,518 4,801 10,319 5,344 46,100 51,444 ______ _____ _____ ______ _____ _____ Investment management fee (1,734) - (1,734) (1,442) - (1,442) Investment performance fee - - - - (1,611) (1,611) Other expenses (464) - (464) (457) - (457) ______ _____ _____ ______ _____ ____ Total expenses (2,198) - (2,198) (1,899) (1,611) (3,510) ______ _____ _____ ______ _____ _____ Profit before finance costs and tax 3,320 4,801 8,121 3,445 44,489 47,934 Finance costs (2,643) - (2,643) (1,347) - (1,347) ______ _____ _____ ______ _____ _____ Profit before taxation 677 4,801 5,478 2,098 44,489 46,587 Taxation (617) - (617) (475) - (475) ______ _____ _____ ______ _____ _____ Profit after taxation 60 4,801 4,861 1,623 44,489 46,112 ______ _____ _____ ______ _____ _____ Return per Ordinary share 0.07p 5.88p 5.95p 2.01p 55.14p 57.15p The total column of this statement is the income statement of the Group prepared in accordance with IFRS. The supplementary revenue return and capital return columns are both prepared under guidance published by the Association of Investment Companies (`AIC') All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued during the year. CONSOLIDATED BALANCE SHEET as at 31 May 2008 2008 2007 £'000 £'000 Non current assets Investments held at fair value through profit or loss 231,506 226,817 _______ _______ Current assets Investments held at fair value through profit or loss 12,182 5,398 Receivables 2,276 2,827 Cash at bank 2,149 - _______ _______ 16,607 8,225 _______ _______ Total assets 248,113 235,042 Current liabilities (59,594) (52,764) _______ _______ Total assets less current liabilities 188,519 182,278 ======= ======= Capital and reserves Called up share capital 818 812 Share premium 41,286 39,912 Special reserve 37,597 37,597 Capial redemption reserve 22 22 Retained earnings 108,796 103,935 _______ _______ Total equity 188,519 182,278 ======= ======= Net Asset Value per Ordinary share 230.56p 224.58p Approved by the Board of Directors and authorised for issue on 19 August 2008. H M Priestley Chairman CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Capital Share Share Special Redemption Retained For the year ended 31 May 2008 Capital Premium Reserve Reserve Earnings Total £'000 £'000 £'000 £'000 £'000 £'000 31 May 2007 812 39,912 37,597 22 103,935 182,278 Ordinary share issue 6 1,385 - - - 1,391 Share issue costs - (11) - - - (11) Net profit for the year - - - - 4,861 4,861 ______ _____ _____ ______ _______ _______ Balance at 31 May 2008 818 41,286 37,597 22 108,796 188,519 ______ _____ _____ ______ _______ _______ Capital Share Share Special Redemption Retained For the year ended 31 May 2007 Capital Premium Reserve Reserve Earnings Total £'000 £'000 £'000 £'000 £'000 £'000 31 May 2006 807 38,843 37,597 22 57,823 135,092 Ordinary share issue 5 1,093 - - - 1,098 Share issue costs - (24) - - - (24) Net profit for the year - - - - 46,112 46,112 ______ _____ _____ ______ _______ _______ Balance at 31 May 2007 812 39,912 37,597 22 103,935 182,278 ______ _____ _____ ______ _______ _______ CONSOLIDATED CASH FLOW STATEMENT for the year ended 31 May 2008 2008 2007 £'000 £'000 Cash flows from operating activities Purchases of investments (90,229) (102,678) Sales of investments 98,250 76,167 Realised gains / (losses) on foreign currency 61 (102) Investment income received 5,527 3,638 Deposit interest received 30 21 Other cash receipts 466 - Investment management fee paid (1,676) (1,681) Investment performance fee paid (1,611) - Sales less purchases of dealing subsidiary (6,882) (175) Other cash expenses (502) (521) _______ _______ Cash inflow / (outflow) from operating activities before 3,434 (25,331) finance costs and taxation Finance costs (2,509) (1,087) Taxation (774) (521) _______ _______ Net cash inflow / (outflow) from operating activities 151 (26,939) Financing activities Ordinary shares issued 1,391 1,098 Share issue costs (11) (24) Short term loans received 91,168 108,430 Short term loans repaid (85,482) (64,170) Long term loan repaid - (19,448) _______ _______ Increase / (decrease) in cash 7,217 (1,053) _______ _______ Increase / (decrease) in cash and cash equivalents 7,217 (1,053) Cash and cash equivalents at start of year (5,068) (4,015) _______ _______ Cash and cash equivalents at end of year 2,149 (5,068) _______ _______ DIRECTORS' RESPONSIBILITIES FOR THE ACCOUNTS The Directors are responsible for preparing the Annual Report and financial statements in accordance with applicable United Kingdom law and those International Financial Reporting Standards (`IFRS') as adopted by the European Union. The Directors are required to prepare financial statements for each financial year which present fairly the financial position of the Company and of the Group and the financial performance and cash flows of the Company and of the Group for that period. In preparing those financial statements, the Directors are required to: (i)select suitable accounting policies and then apply them consistently; (ii)present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information; (iii)provide additional disclosures when compliance with the specific requirements in IFRSs is insufficient to enable users to understand the impact of particular transactions, other events and conditions on the entity's financial position and financial performance; and (iv)state that the Group has complied with IFRS, subject to any material departures disclosed and explained in the financial statements. The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Company and of the Group and enable them to ensure that the financial statements comply with the Companies Act 1985 and Article 4 of the IAS Regulation. They are also responsible for safeguarding the assets of the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. So far as each Director is aware at the time the report is approved, there is no relevant audit information of which the auditors are unaware and that each Director has taken all reasonable steps to make themselves aware of any relevant information and to establish that the auditors are aware of that information. The Directors confirm to the best of their knowledge that: (a)the financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and (b)the Management Report includes a fair view of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that the Company faces. By order of the Board H M Priestley Chairman 19 August 2008 NOTES 1. Income 2008 2007 Group Group £'000 £'000 Income from investments Dividends from United Kingdom companies 649 496 Dividends from overseas companies 4,689 3,240 5,338 3,736 Other income Deposit interest 30 24 Profit on dealings by subsidiary 150 1,584 180 1,608 Total income 5,518 5,344 Total income comprises Dividends 5,338 3,736 Interest 30 24 Other income 150 1,584 5, 518 5,344 Income from investments Listed in the UK 649 496 Listed overseas 4,689 3,240 5,338 3,736 2. Reconciliation of profit before finance costs and taxation to net cash outflow from operating activities 2008 2007 Group Group £'000 £'000 Profit before finance costs and 8,121 47,934 taxation Gain on non current asset (11,596) (46,239) investments Foreign exchange loss on loans 6,868 45 Purchases of non current asset (90,229) (102,678) investments Sales of non current asset 98,250 76,167 investments Decrease in prepayments and 123 129 accrued income Increase in current asset (6,784) (2,204) investments (Decrease) / increase in (106) 556 subsidiary purchases awaiting settlement Decrease/ (increase) in subsidiary 366 (366) sales awaiting settlement (Decrease) / increase in other (1,579) 1,325 creditors and accruals ______ ______ Net cash inflow / (outflow) from operating activities 3,434 (25,331) before interest and taxation 3. Related parties Mr. Darwall is a Director of Jupiter Asset Management Limited and Jupiter Investment Management Group Limited whose subsidiaries Jupiter Asset Management Limited and Jupiter Administration Services Limited receive investment management and administration fees as set out below. Jupiter Asset Management Limited is contracted to provide investment management services to the Company (subject to termination by not less than one years notice by either party) for a quarterly fee of 0.1875 per cent. of the net assets of the Group excluding the value of any Jupiter managed investments payable in arrears on 31 May, 31 August, 30 November and the last calendar day of February. Management fees of £459,381 were outstanding as at 31 May 2008 (2007: £341,606 ). Jupiter Asset Management Limited is also entitled to an investment performance fee which is based on the out-performance of the lower of the price of an Ordinary share or 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 lower of the price of an Ordinary share (plus any dividends per Ordinary share paid during the period) or 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 closing price of an Ordinary share or the Net Asset Value per Ordinary share on the last business day of the previous accounting period (whichever is the lower); (b) the lower of the price of an Ordinary share or the Net Asset Value per Ordinary share (as the case may be) 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 total amount of any performance fee payable in respect of one accounting period is limited to 7.5 per cent. of the Total Assets of the Company. No performance fee was payable for the year ended 31 May 2008 (2007: £ 1,371,200). Jupiter Administration Services Limited is contracted to provide secretarial, accounting and administrative services to the Company for an annual fee of £60,381 plus VAT adjusted each year in line with the Retail Price Index payable quarterly (2007: £57,892 plus VAT). None of the fee payable for the year ended 31 May 2008 was outstanding at the year end (2007: Nil). The Company has invested from time to time in funds managed by Jupiter Investment Management Group Limited or its subsidiaries. The only such holding as at 31 May 2008 was East European Food Fund representing 0.4 per cent. of total investments. The Annual General Meeting of the Company has been convened for Tuesday 23 September 2008. As per the Company's stated policy there will be no dividend paid. The preliminary announcement is prepared on the same basis as set out in the Statutory Accounts for the year ended 31 May 2007 and was approved by the Board of Directors on 19 August 2008. The above financial information does not constitute statutory accounts as defined in section 240 of the Companies Act 1985. The Auditors have reported on the Statutory accounts for the years ended 31 May 2007 and 31 May 2008; their reports was unqualified, and did not contain statements under s237(2) or (3) Companies Act 1985. Statutory accounts for the year ended 31 May 2007 have been delivered to the Registrar of Companies and Statutory accounts for the year ended 31 May 2008 will be delivered in due course. The Annual Report and Accounts are expected to be posted to all registered shareholders shortly and copies may be obtained from the registered office of the Company at 1 Grosvenor Place, London SW1X 7JJ. For further information please contact: Richard Pavry Director, Investment Trusts Jupiter Asset Management Limited rpavry@jupiter-group.co.uk 020 7314 4822 Jenny Thompson Company Secretary Jupiter Asset Management Limited jthompson@jupiter-group.co.uk 020 7314 5565

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