Half-yearly report

Jupiter European Opportunities Trust PLC

Announcement of Unaudited Interim Results for the half year to 30^th November 2011

Capital Performance
	30-Nov	31-May
	2011	2011	% Change
Total Assets less Current Liabilities (£'000)	206,481	252,813	-18.1*
FTSE World Europe ex UK Total Return Index**	632.00	786.64	-19.7
** Adjusted for the repurchase and cancellation of shares during the period.
** 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 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.
Ordinary Share Performance
	30-Nov	31-May
	2011	2011	% Change
Net Asset Value (pence)	259.50	316.73	-18.1
Mid Market Price (pence)	234.25	290.0	-19.2
Discount to Net Asset Value (%)	9.7	8.4
Performance since launch
		Net Asset
	Total Assets	Value
	less	per
	Current	Ordinary
	Liabilities	Share
Year ended 31 May	£'000	p
20 November 2000 (launch)	93,969	94.66
2001	83,600	89.29
2002	91,028	91.12
2003	84,592	83.82
2004	97,915	109.25
2005 (restated)*	117,679	133.54
2006	154,927	167.47
2007	182,278	224.58
2008	188,519	230.56
2009	131,457	162.35
2010	185,504	232.4
2011	252,813	316.73
30 November 2011	206,481	259.50

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

CHAIRMAN'S STATEMENT
and Interim Management Report

Equity markets generally rise, it has been said, when politicians go on holiday. On that basis it could be argued that eurozone politicians have not taken enough holidays of late. We have recently undergone a period of exceptional volatility, as investors drive prices up ahead of European summit meetings (these fast becoming almost a monthly event), only to see them fall back on disappointment that not enough has been done to cure the problems: banks' reluctance to lend, the prospect of low growth being exacerbated by widespread austerity programmes, and above all the consequences of a 'one size fits all' overarching policy which lumps the hardworking with the indolent, the savers of the north with the spendthrifts of the south, Fleiss with mañana.

Over the six months under review, therefore, the net asset value of your Company's shares fell by 18.1 per cent., from 316.73p to 259.50p. It is small comfort that our benchmark, the FTSE World Europe ex-UK Index, dropped by 19.7 per cent. in that same period. During November our Manager, Alexander Darwall, made some substantial alterations to the investment portfolio, to which he refers in detail in his Manager's Review below. One consequence was that the UK equity content rose to over 40 per cent. as at 30 November last. We are sometimes asked why we continue to use our current benchmark when its counterpart, the FTSE World Europe cum-UK Index is, on the face of it, more representative of your Company's asset allocation. This is important, as your Managers are entitled to a performance fee if they outperform the benchmark and, for what it is worth, the FTSE World Europe cum-UK Index fell in the June-November period by 15.6 per cent.; in other words, by less than your Company's net asset value. The answer is that the UK component of the Index is less and less representative of the UK economy as more and more international firms seek a London listing. Recent examples are Evraz, Polymetal and CRH, the first two of which do very little business in the UK. But your Board will keep the situation under constant review.

Discount Management

A total of 250,000 shares were bought in for cancellation during the period, at an average discount (to net asset value) of 11.97 per cent. Although the discount widened slightly over the period, it remained in single figures for most of that time and below the peer group average.

Gearing

As prefigured in my annual Statement, the £60 million multicurrency revolving credit facility was renewed for a further year, on favourable terms, with Scotiabank Europe PLC. As equity markets fell, your Manager increased your Company's level of borrowings, so that over the period the gearing ratio (net borrowings as a percentage of total assets) rose from 13 per cent. to 18 per cent.

Outlook

At the time of writing, the politicians are on holiday and equity markets are enjoying a mini-rally. The problems of Europe have, however, only been partly addressed; as has frequently been remarked about the war in Afghanistan, 'some progress has been made but challenges remain'. Taking an optimistic approach, we have to hope that when European leaders are faced with Armageddon it will concentrate their minds wonderfully and that they will embrace long-term solutions as opposed to short term palliatives. Meanwhile there are encouraging signs in the wind; the US economy does appear to have some momentum, and Chinese inflation has fallen somewhat, giving the authorities scope for a less restrictive monetary policy. But in the short term we must expect volatile conditions to prevail.

H M Priestley
Chairman
27 January 2012

MANAGER'S REVIEW

The Net Asset Value of the Company's Ordinary shares fell by 18.1 per cent. during the six months to 30th November 2011. This compares with a 19.7 per cent. decline, Sterling adjusted, of the FTSE World Europe ex UK Index. At the start of the period under review the Company's total borrowings were £32 million. This figure had increased to £51 million by the period end. As individual stocks became, in our opinion, better value so we increased gearing to buy those companies. Many of 'our' companies have markedly improved their cash generating capacity in recent years and yet this has not been reflected in valuations.

The FTSE World (total return) Index declined 8.3 per cent. The Company's benchmark, the FTSE World Europe ex UK Total Return Index fell 19.7 per cent. The MSCI Latin America Index was 13.1 per cent. lower; the MSCI AC Asia ex-Japan Index was down 16.8 per cent. The obvious reason for the European markets' poor absolute and relative performance is the macro challenges of the eurozone. There are two principal, related aspects to the crisis: sovereign debt and the banking system. The extent and combination of these twin challenges vary in different countries. The effect was manifest in the slowdown in earnings growth. According to UBS, the investment bank, Europe ex UK suffered a 3 per cent. decline in profits in 2011, though once financials and energy are taken out the figure is a positive 3.5 per cent. This latter figure compares with UBS' estimate of 8.4 per cent. earnings growth for the world, 3.1 per cent. for Japan, 13.6 per cent. for the UK and 12.1 per cent. for the US. Within the European earnings figures there was a marked differentiation between on the one hand the domestic, regulated, 'captive' companies and on the other the more global, companies, freer from European constraints. The former category included the European utilities and telecoms companies which suffered adverse regulatory changes. Another disappointing segment of the market were the 'green' energy companies as governments - and their electorates - resiled from the costs of alternative energy policies. 'Global' companies still have a broadly positive backdrop. The most recent estimates from UBS are for 3.1 per cent. world GDP growth in 2011 followed by 2.7 per cent. and 3.4 per cent. in 2012 and 2013 respectively. Their Europe estimates for those same three years are 1.6 per cent., -0.2 per cent. and 1.3 per cent. Clearly growth is disappointing in Europe. Asia remains the area of strongest growth. Were this to falter it would have a significant impact on investment prospects.

Your Company's relatively flat performance was the amalgam of different factors: a negligible exposure to the worst performing sectors (banks, utilities and telecoms), generally good stock picking, and the negative impact of gearing. There was an unusual degree of polarisation between winners and losers in our stock picking - few of our holdings performed in line with the market. The positive contributors can be categorised roughly as healthcare, technology and global services. Though, as ever, an understanding of the individual companies is more instructive.

Wirecard was the best performing stock in the period under review. It offers internet and payment processing services and has benefitted from the increase in online retailing. Pearson was another significant contributor. The leading international publisher of educational material is, too, a beneficiary of the migration to digital. Experian was another good performer. It is a leading international credit and marketing services supplier and is another company that has successfully moved into online services. In healthcare there were two significant contributors to performance: Fresenius SE and Novo Nordisk. Both companies continue to benefit from the continuing demand for renal care and diabetes treatment, respectively. US healthcare reform has not had an undue impact on these companies. Vopak and Intertek are both companies engaged in providing global services. The former, as the leading independent operator of storage tanks for oil and chemicals is benefitting from the shifts in global production and demand. Intertek, the UK listed testing and inspection company, is a beneficiary of increasing world trade and more rigorous standards. Three stocks performed very badly: Aixtron, Marine Harvest and Oriflame. Weaker sales at Aixtron revealed what we considered to be flaws in the business model. Likewise, Marine Harvest's business model disappointed us with a sharp downturn in sales and profits. Oriflame, also, continues to suffer glitches in its trading performance that hints at flaws in their business model. Whilst some of the other holdings underperformed, it is only when the business model proves to be fragile or damaged that we become greatly concerned and where there are significant share price declines.

Turnover was higher than in recent reporting periods due to the sale of the three aforementioned 'mistakes'. Shares in Qiagen were also sold as its business appears to be impacted by the slowdown in US healthcare spending. Shares in De la Rue and Takkt were sold on valuation grounds. There was an eclectic group of new purchases: Provident Financial, the British financial services company; Edenred, the French listed international vouchers business; Amadeus, the Spanish listed, global travel services company; and Thrane & Thrane, the Danish supplier of equipment for the satellite industry. Smaller purchases include Telecity, a UK based data warehouse business, Smith & Nephew, the British medical devices company and Zodiac, the aeronautic supplier. We also took positions in Aggreko, the British listed power rental company and adidas, the global sportswear company.

Outlook

No good purpose is served by confident forecasting. Rather, your Company is positioned to survive, even prosper, in a range of macro developments. There are a number of readily identifiable factors that are likely to shape the macroeconomic outcome: high debt levels in the West, a weak European banking sector, unsupportive European politics, robust economic growth in the developing world, growing world trade and the benefits of technology spread. All these, and many other factors, could improve or detract from the outlook. However, the paramount driver of the portfolio's performance is individual company success. We continue to try to identify 'special' companies: companies that control to a great extent their own fortunes; that have some kind of sustainable advantage; that meet a recurring and growing need for their customers; and that deliver demonstrably good value to their clients. Such companies exist and, in all but the gravest of global developments, will reward investors' patience.

Alexander Darwall
Jupiter Asset Management Limited
27 January 2012

Consolidated Statement of Comprehensive Income

For the six months to 30 November 2011 (unaudited)

	30-Nov-11			30-Nov-10
	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 (Note 2)	-	(41,465)	(41,465)	-	36,010	36,010
Currency exchange gain/(loss)	-	(193)	(193)	-	(133)	(133)
Investment income	1,796	-	1,796	2,085	-	2,085
Total income	1,796	(41,658)	(39,862)	2,085	35,877	37,962
Investment management fee	(950)	-	(950)	(861)	-	(861)
Investment performance fee	-	-	-	-	(3,519)	(3,519)
Other expenses	(312)	-	(312)	(196)	-	(196)
Total expenses	(1,262)	-	(1,262)	(1,057)	(3,519)	(4,576)
Return before finance costs
and tax	534	(41,658)	(41,124)	1,028	32,358	33,386
Finance costs	(316)	-	(316)	(157)	-	(157)
Return before taxation	218	(41,658)	(41,440)	871	32,358	33,229
Taxation	14	-	14	(288)	-	(288)
Return after taxation	232	(41,658)	(41,426)	583	32,358	32,941
Return per Ordinary share (Note 3)	0.29p	(52.32)p	(52.03)p	0.73p	40.54p	41.27p

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 items in the above statement derive from continuing operations.

No operations were discontinued or acquired in the period.

The financial information does not constitute 'accounts' as defined in section 434 of the Companies Act 2006.

Consolidated Statement of Financial Position
As at 30 November 2011
	30-Nov	31-May
	2011	2011
	(unaudited)	(audited)
	£'000	£'000
Non current assets
Investments held at fair value through profit or loss	257,238	290,438
Current assets
Receivables	1,494	2,238
Cash at bank	367	488
	1,861	2,726
Total assets	259,099	293,164
Current liabilities	(52,618)	(40,351)
Total assets less current liabilities	206,481	252,813
Capital and reserves
Called up share capital	795	798
Share premium	41,286	41,286
Special reserve	33,687	34,376
Capital redemption reserve	45	42
Retained earnings (Note 6)	130,668	176,311
Total equity	206,481	252,813
Net Asset Value per Ordinary share (Note 7)	259.50p	316.73p

Consolidated Statement of Changes in Equity

For the six months to 30 November 2011

				Capital
	Share	Share	Special		Redemption	Retained
For the six months to	Capital	Premium	Reserve		Reserve	Earnings	Total
30-Nov-11	£'000	£'000	£'000		£'000	£'000	£'000
1 June 2011	798	41,286	34,376		42	176,311	252,813
Net loss for the period	-	-	-		-	(41,426)	(41,426)
Ordinary share cancellation	(3)	-	(689)		3	-	(689)
2011 interim dividend	-	-	-		-	(4,217)	(4,217)
Balance at 30 November 2011	795	41,286	33,687		45	130,668	206,481
					Capital
	Share	Share	Special		Redemption	Retained
For the six months to	Capital	Premium	Reserve		Reserve	Earnings	Total
30-Nov-10	£'000	£'000	£'000		£'000	£'000	£'000
1 June 2010	798	41,286	34,376		42	109,002	185,504
Net profit for the period	-	-	-		-	32,941	32,941
2010 interim dividend	-	-	-		-	(1,676)	(1,676)
Balance at 30 November 2010	798	41,286	34,376		42	140,267	216,769

Consolidated Cash Flow Statement
For the six months to 30 November 2011 (unaudited)
		2011	2010
		£'000	£'000
Cash flows from operating activities
Purchases of investments		(54,863)	(22,684)
Sales of investments		44,853	24,332
Realised losses on foreign currency		(193)	(133)
Investment income received		2,148	2,386
Interest received		2	-
Investment management fee paid		(1,524)	(801)
Investment performance fee paid		(4,237)	-
Other cash expenses		(404)	(238)
Dividend paid		(4,217)	(1,676)
Cash (outflow)/inflow from operating activities before finance costs and taxation		(18,435)	1,186
Finance costs paid		(291)	(163)
Taxation received/(paid)		278	(124)
Net cash (outflow)/inflow from operating activities		(18,448)	899
Financing activities
Ordinary shares cancelled		(689)	-
Short-term loans received		89,000	44,000
Short-term loans repaid		(74,000)	(49,000)
Decrease in cash		(4,137)	(4,101)
Cash and cash equivalents at start of period		488	1,233
Cash and cash equivalents at end of period		(3,649)	(2,868)

Notes to the Financial Statements for the six months to 30 November 2011

1.  Accounting Policies

The consolidated accounts comprise the unaudited financial results of the Company and its subsidiary JEOT Securities Limited for the six months to 30 November 2011. The accounts are presented in pounds sterling, as this is the functional currency of the Group.

The consolidated 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.

A summary of the principal accounting policies, all of which have been applied consistently throughout the period, is set out below:

Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods and services provided in the normal course of business.

Revenue includes dividends from investments quoted ex-dividend on or before the balance sheet date.

Deposit and other interest receivable is accounted for on an accruals basis.

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 AIC, supplementary information which analyses the Statement of Comprehensive Income between items of a revenue and capital nature has been presented alongside the Statement of Comprehensive Income. In accordance with the Company's status as a UK investment company under section 833 of the Companies Act 2006, net capital returns may not be distributed by way of dividend.

An analysis of retained earnings broken down into revenue items, which may be distributed as dividends and capital items is given in Note 6. The Company's Articles prevent the distribution of capital profits. In arriving at this breakdown, expenses have been presented as revenue items except for that part of any Investment performance fee which is deemed by the Directors to relate to the capital outperformance of the Company's investments. Any such amount is charged to capital.

Investments

All investments are classified as held at fair value through profit or loss. Changes in the fair value of investments held at fair value through profit or loss and gains and losses on disposal are recognised in the statement of comprehensive income as 'Gains on investments at fair value through profit or loss'. The fair value of listed investments is based on their quoted bid market price at the balance sheet date without any deduction for estimated future selling costs. All purchases and sales are accounted for on a trade date basis.

2.  Gains on investments

	Six months to	Six months to
	30-Nov-11	30-Nov-10
	£'000	£'000
Net (loss) / gain realised on sale of investments	(8,185)	7,574
Movement in investment holding gains	(33,280)	28,436
(Loss)/Gains on investments	(41,465)	36,010

3.  Return per Ordinary Share
The return per Ordinary share figure is based on the net loss for the six months of £41,426,000 (six months to 30 November 2010: Gain £32,941,000) and on 79,625,230 Ordinary shares (six months to 30 November 2010: 79,819,523), being the weighted average number of Ordinary shares in issue during the period.

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

	Six months to	Six months to
	30-Nov-10	30-Nov-09
	£'000	£'000
Net revenue profit	232	583
Net capital (loss)/profit	(41,658)	32,358
Net total return	(41,426)	32,941
Weighted average number of Ordinary
shares in issue during the period	79,625,230	79,819,523
Revenue return per Ordinary share	0.29p	0.73p
Capital return per Ordinary share	(52.32)p	40.54p
Total return per Ordinary share	(52.03)p	41.27p

4.  Transaction costs
During the period expenses were incurred in acquiring or disposing of investments classified as fair value through profit or loss. These have been expensed through capital and are included within gains/(losses) on investments in the Statement of Comprehensive Income. The total costs were as follows:

	Six months to	Six months to
	30-Nov-11	30-Nov-10
	£'000	£'000
Purchases	148	52
Sales	55	55
	203	91

5.  Comparative information
The financial information contained in this interim report does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. The financial information for the six months to 30 November 2011 and 30 November 2010 has not been audited.

The information for the year ended 31 May 2011 has been extracted from the latest published audited financial statements. The audited financial statements for the year ended 31 May 2010 have been filed with the Register of Companies. The report of the auditors on those accounts contained no qualification or statement under section 498(2) of the Companies Act 2006.

6.  Retained earnings

The table below shows the movement in the retained earnings analysed between revenue and capital items.

	Revenue	Capital	Total
	£'000	£'000	£'000
At 1 June 2011	9,773	166,538	176,311
Net return for the period	232	(41,658)	(41,426)
Dividend paid	(4.217)	-	(4.217)
At 30 November 2011	5,788	124,880	130,668

7.  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 £206,481,000 (31 May 2011: £252,813,000) and on 79,569,523 Ordinary shares (31 May 2011: 79,819,523), being the number of Ordinary shares in issue at the period end.

Directors' Responsibility Statement

Related Party Transactions
Mr. Darwall is an employee of Jupiter Asset Management Limited which receives investment management fees as set out below.

Jupiter Administration Services Limited is a sister company of Jupiter Asset Management Limited. Jupiter Administration Services Limited receives 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 1 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. The total fees payable under this agreement are shown in the Consolidated Statement of Comprehensive Income.

Jupiter Asset Management Limited is also entitled to a 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 to be adjusted 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 4.99 per cent. of the Total Assets of the Company. The total fees payable under this agreement are shown in the Consolidated Statement of Comprehensive Income.

Jupiter Administration Services Limited is contracted to provide secretarial, accounting and administrative services to the Company for an annual fee of £65,460 adjusted each year in line with the Retail Price Index payable quarterly.

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 30 November 2011 was East European Food Fund representing 0.1 per cent. of total investments.

Risks and Uncertainties

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. It is not the aim of the Board to eliminate entirely the risk of capital loss, rather it is its aim to seek capital growth. Other key risks faced by the Company relate to foreign currency movements, interest rates, use of derivatives, liquidity risk, gearing risk, the discount to Net Asset Value, regulatory risk, loss of key personnel, operation and financial risks. A detailed explanation of the Risks and Uncertainties facing the Company can be found on page 13 under the heading 'Risks and Uncertainties' in the Company's report and accounts for the year to 31 May 2011

Directors' Responsibility Statement

In accordance with Chapter 4 of the Disclosure and Transparency Rules the Directors confirm that to the best of their knowledge:

1. the condensed set of financial statements has been prepared in accordance with applicable UK accounting standards and gives a true and fair view of the assets, liabilities, financial position and return of the Company;  

2. the half-yearly report includes a fair review of the important events that have occurred during the first six months of the financial year and their impact on the financial statements; 

3. the Directors' Statement of Principal Risks and Uncertainties shown above is a fair review of the principal risks and uncertainties for the remainder of the financial year; and  

4. the half-yearly report includes details on related party transactions. 

The half-yearly financial report for the six months to 30 November 2011 comprises the Chairman's Statement, Manager's Review, the Directors' Responsibility Statement and a condensed set of financial statements, and has not been audited or reviewed by the auditors pursuant to the Auditing Practices Board guidance on Review of Interim Financial Information.

By Order of the Board

H M Priestley
Chairman
27 January 2012

The foregoing represents the full text of the Half-Yearly Report for the six months to 30 November 2011, which will be posted to those shareholders who have requested to receive a copy shortly.  The Report will also be available for download from the Company's website (www.jupiteronline.co.uk) or on request from the Company Secretary.

The interim report for the 6 months ended 30 November 2011 has not been reviewed by the Company's auditors.

By order of the Board

Jupiter Asset Management Limited

Secretaries
Enquiries:
Richard Pavry
Jupiter Asset Management Limited
020 7412 0703

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Source: Jupiter European Opportunities Trust PLC via Thomson Reuters ONE

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