Interim Results

Jupiter European Opps. Trust PLC 29 January 2003 Jupiter European Opportunities Trust PLC - Stock Exchange Announcement Preliminary announcement of unaudited results for the half year to 30th November 2002 CHAIRMAN'S STATEMENT Market conditions remained difficult during the period under review, although once again your Company outperformed its benchmark; net asset value per share fell by 16.2%, compared with a drop of 21.1% in the FTSE World Europe ex-UK Index. The market price discount to the net asset value, hitherto minimal, became unusually volatile during the six months under review and on occasion widened to 18%. The opportunity was taken by the board to buy in a total of 975,000 shares at discounts ranging from 15.4% to 16.1%. As at 30 November the discount had narrowed to 10.9%. Borrowings were reduced over the period from £15.4 million to £10.3 million, but taking account of the Company's holdings of cash and gilts against the sums drawn down under the facility, the effective level of gearing was lower still, with £6.3 million held in UK long dated gilts at 30th November 2002. This figure has since been reduced by the sale of one of the gilt holdings. A small number of equity short positions were established within the trading subsidiary which thus far have enhanced its profitability. However, your Board has set strict limits for this activity and keeps a close eye on the overall short position. The immediate market outlook does not look especially propitious as we move into 2003. However, our ability to increase the level of gearing, at a time when other investing institutions are forced to liquidate positions, should stand us in good stead. H Priestley Chairman 29th January 2003 MANAGER'S REVIEW The economic background in Europe continued to deteriorate in the period under review. According to the OECD's latest forecasts the euro area grew by only 0.8% in 2002 and is expected to grow by 1.8% in 2003. Whilst this is better than Japan (-0.7% and 0.8% respectively), it is markedly worse than the 2.3% and 2.6% for the United States, and worse than the UK (1.5% and 2.2% respectively). Within Europe, Germany and Italy continue to suffer sluggish growth. At the other end of the scale, Denmark, Norway, Spain and particularly Ireland are performing well in broad economic terms. The reasons for Europe's continuing poor economic performance remain: restrictive fiscal and monetary policies, worsening budget deficits, poor productivity, lack of labour flexibility and damaging political interference. The euro's strength against the US dollar and sterling this year is not a reflection of changing economic fortunes. Rather it is due to the absence of the massive acquisition of North American assets by European companies that marked the late 1990s and 2000. That said there is the possibility that the European Central Bank will change its monetary policies and reduce interest rates. However, whatever the short term benefits, such a change could exacerbate the underlying problems in Europe. The economic performance was matched by the equity markets. In the six month period the FTSE World Europe ex-UK index was down 21.1%, better than Japan, but worse than the FTSE All Share, which fell by 17.8% and worse than the S&P Composite which was down by 17.3%. Likewise, within Europe, the German index was the worst performing (down 31.5% in sterling) with Spain and Sweden amongst the best (down 16.4% and 12.3% respectively). The better performing sectors within Europe included electricity and gas utilities, real estate, transport, retailers and sundry 'consumer non-cyclicals'. The worse performing sectors included financials, industrials, and technology. There were remarkable divergences: construction stocks in Italy and Spain were as strong as the German ones were weak. Similarly, Scandinavian banks performed well just as German, Swiss and Italian banks were weak. Your Company's investment approach remains the same. We seek to identify companies with a good record, proven product and business model, combined with evidence of entrepreneurial endeavour and the prospect of above average growth opportunities. Almost invariably your Company invests in companies whose prospects depend as far as reasonably possible on their own efforts and not on exogenous factors beyond their control. Unsurprisingly, as the investment approach remains the same there has been relatively little activity in the portfolio. The most significant disposal was that of Air Liquide which was sold because of the slowdown in demand from their customer base. The other major disposal was Royal Dutch Shell. Like Air Liquide this was sold as the demand background weakened. Other disposals included Adidas-Salomon and Uponor, sold on valuation grounds. The holding in Euler-Hermes was sold as this company failed to meet our expectations. Positions were reduced in Reed Elsevier, AB Ports and Essilor. All these remain good businesses. The holding in The Health Clinic was sold before its bankruptcy. We also sold our holding in Scottish and Newcastle, a position that was acquired as a result of that company's takeover of the Finnish company Hartwall. We increased our holding in Intertek Testing Services, the UK verification and inspection company. Further purchases of the Danish medical supplies company Coloplast were also made. This company continues to deliver consistently impressive results. Most purchases were also building on existing holdings such as Waterford Wedgwood, Stedim, DNB, Matalan, NovoNordisk, Medion, Techem and Soitec. New holdings were taken in Gehe, Imerys and Ryanair. Whilst geographic weightings play little part in the investment strategy, it should nevertheless be noted that the UK weighting rose to 22%. This marked increase was due to the purchase of UK long dated gilts. These positions were taken in the absence of compelling equity opportunities at the time. Fixed interest investments are not expected to be important parts of the investment portfolio over a longer period of time. The manager's focus remains on equities. Accordingly, the UK portion of the portfolio is likely to fall. Half the gilt position has been sold after the period end at a profit. Gearing too is a function of the manager's ability to identify good investment opportunities and accordingly the level of borrowings changed against a background of a volatile equity market. Borrowings at the start of the period under review were £15.5m, dropping to £5m at the end of June. At the period end borrowings stood at just over £10m. The trading subsidiary made a profit of £513,000 in the six month period. This included a first time positive contribution from short positions. It may be that the expansion of the European Union brings to a head a number of deep rooted problems on the continent. Certainly these problems (as outlined above) are likely to become more acute as growth rates remain sluggish. Nevertheless, even with this backdrop there is no doubt that investment opportunities exist in Europe and it is the manager's ability, or otherwise, to uncover such opportunities that is likely to be the greatest determinant of your Company's success. A F C Darwall Manager Jupiter Asset Management Limited 29th January 2003 CONSOLIDATED STATEMENT OF TOTAL RETURN (incorporating the revenue account) for the six months to 30th November 2002 (Unaudited) 2002 2001 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Realised losses on investments - (2,101) (2,101) - (5,600) (5,600) (Decrease)/increase in unrealised appreciation of - (10,310) (10,310) - 2,163 2,163 fixed asset investments ______ ______ ______ ______ ______ ______ Total capital losses on investments (12,411) (12,411) - (3,437) (3,437) Foreign exchange losses on loan - (178) (178) - (545) (545) Other exchange (losses)/gain - (11) (11) - 16 16 Income 372 - 372 369 - 369 Gain/(loss) on dealings by subsidiary 513 - 513 (638) - (638) Investment management fee (309) - (309) (352) - (352) Other expenses (210) - (210) (246) - (246) ______ ______ ______ ______ ______ ______ NET RETURN/(LOSS) BEFORE FINANCE COSTS AND TAXATION 366 (12,600) (12,234) (867) (3,966) (4,833) Interest payable (198) - (198) (269) - (269) ______ ______ ______ ______ ______ ______ RETURN/(LOSS) ON ORDINARY ACTIVITIES BEFORE TAX 168 (12,600) (12,432) (1,136) (3,966) (5,102) Tax on ordinary activities (22) - (22) (26) - (26) ______ ______ ______ ______ ______ ______ RETURN/(LOSS) ON ORDINARY ACTIVITIES AFTER TAX FOR 146 (12,600) (12,454) (1,162) (3,966) (5,128) THE FINANCIAL PERIOD ====== ====== ====== ====== ====== ====== TRANSFER TO RESERVES 146 (12,600) (12,454) (1,162) (3,966) (5,128) ====== ====== ====== ====== ====== ====== RETURN/(LOSS) PER ORDINARY 0.18p (15.25)p (15.07)p (1.40)p (4.78)p (6.18)p SHARE ====== ====== ====== ====== ====== ====== CONSOLIDATED BALANCE SHEET as at 30th November 2002 (restated) 30th November 2002 31st (Unaudited) May 2002 £'000 (Audited) £'000 FIXED ASSETS Investments 71,029 85,753 ______ ______ CURRENT ASSETS Investments 1,467 3,166 Debtors 1,135 450 Cash at bank 622 2,019 _______ _______ 3,224 5,635 CREDITORS: amounts falling due within one year (1,348) (360) _______ ______ NET CURRENT ASSETS 1,876 5,275 _______ _______ TOTAL ASSETS LESS CURRENT 72,905 91,028 LIABILITIES CREDITORS: amounts falling due after more than one year (10,325) (15,454) _______ ______ NET ASSETS 62,580 75,574 ====== ===== CAPITAL AND RESERVES Called up share capital 820 829 Share premium 38,386 38,843 Special reserve 38,303 38,843 Redemption reserve 466 - Capital reserve - realised (9,197) (7,085) Capital reserve - unrealised (5,001) 5,487 Revenue reserve (1,197) (1,343) ______ ______ TOTAL SHAREHOLDERS' FUNDS 62,580 75,574 ===== ===== NET ASSET VALUE PER ORDINARY SHARE 76.35p 91.12p CONSOLIDATED CASH FLOW STATEMENT for the 6 months to 30th November 2002 (unaudited) 30th November 2002 30th November 2001 £'000 £'000 OPERATING ACTIVITIES Net cash inflow / (outflow) from operating activities 1,877 (2,525) _______ _______ SERVICING OF FINANCE Interest paid (238) (316) _______ _______ Net cash outflow from servicing of finance (238) (316) _______ _______ TAXATION Net tax received / (paid) 98 (43) _______ _______ CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT Purchase of fixed asset investments (37,735) (28,348) Sale of fixed asset investments 39,426 32,609 _______ _______ Net cash inflow from capital expenditure and financial investment 1,691 4,261 _______ _______ Net cash inflow before financing 3,428 1,377 _______ ________ FINANCING Long term loan received 4,985 4,958 Long term loan repaid (10,292) (5,028) Cost of share repurchase (540) - _______ _______ Net cash outflow from financing (5,847) (70) _______ _______ (Decrease)/increase in cash (2,419) 1,307 ====== ====== The interim report will be sent to all registered shareholders and copies may be obtained from the registered office of the Company at 1 Grosvenor Place, London, SW1X 7JJ. BY ORDER OF THE BOARD JUPITER ASSET MANAGEMENT LIMITED SECRETARIES This information is provided by RNS The company news service from the London Stock Exchange

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