Half-year Report

RNS Number : 0781N

JPMorgan American IT PLC

04 August 2017

 

LONDON STOCK EXCHANGE ANNOUNCEMENT

JPMORGAN AMERICAN INVESTMENT TRUST PLC

UNAUDITED HALF YEAR RESULTS 

FOR THE SIX MONTHS ENDED 30TH JUNE 2017

Legal Entity Identifier: 549300QNAI4XRPEB4G65

Information disclosed in accordance with the DTR 4.2.2

chair's statement

Performance

In my first statement as the Chair of your Company, I am pleased to report that the Company has outperformed its benchmark in the first half of the current financial year. In the six months to 30th June 2017, the total return on net assets per share and in sterling terms was +5.8%, which compares favourably with the total return from the Company's benchmark, the S&P 500 Index in sterling terms, of +3.9%. Following the significant boost that currency provided last year to returns as the dollar strengthened against sterling by 16.6%, this year sterling has strengthened by 5.3% against the dollar and reduced market returns accordingly.

As referred to in the Investment Manager's Report below, it is pleasing to see positive contributions to performance relative to benchmark coming from both large and small capitalisation elements of the portfolio. The return to Ordinary shareholders per share and in sterling terms was +3.6%, reflecting a small widening of the Company's discount to net asset value per share ('NAV') at which it traded at the end of the period.

Investment Process and Management Fees

My predecessor, Sarah Bates, highlighted in her final statement published in March 2017, and at the Company's Annual General Meeting in May, that the Board was resolved to produce an investment offering and fee structure for the Company which is attractive and sustainable for shareholders. Over the past years the Board has taken the initiative, establishing a more robust gearing approach and latterly working with our investment manager, Garrett Fish, to look at improvements to the investment process, which are now being incorporated into the management of the portfolio. For full details of the Board's review of the investment process and its findings please refer to the Chair's statement within the Company's 2016 Annual Report.

The Board and the Company's Manager, JPMorgan Funds Limited ('JPMF') have subsequently worked together constructively to structure an investment management fee arrangement that takes into account a range of factors. This has focused on the Board's obligation to the Company's shareholders to ensure that they receive good value investment management, but also the short and longer term implications of the Company's positioning in the investment market place.

The Board was pleased to announce on 26th June 2017 a significant reduction in the Company's fee structure. With effect from 1st October 2017, the annual management fee, currently 0.50% of total assets less current liabilities, with no tiering, will be charged at an annual rate as detailed below:

− 0.35% on the first £500 million of net assets;

− 0.30% on net assets above £500 million and up to £1 billion; and

− 0.25% on any net assets above £1 billion.

There is no change to the Company's performance fee arrangements. Both the Board and JPMF believe that this new fee structure will allow the Company to retain its competitive position against both Exchange Traded Funds ('ETFs') and other quant and smart beta products, while continuing to pursue a core active management strategy with an improved investment process. These changes were agreed shortly in advance of the publication of the Financial Conduct Authority's report into the asset management industry, and I am pleased they are consistent with that report.

Share price and Discount Management

The Company's shares have traded at a discount to the NAV throughout the period under review and the Company has continued to buy back its shares in significant volumes. The Company bought into Treasury a total of 22.4 million shares (17.7 million shares in the whole of the 2016 year), or 8.7% of the Company's issued share capital at the beginning of 2017. These shares were purchased at an average discount to NAV of 4.1%, producing an accretion to the NAV for continuing shareholders. Such action reaffirms the Board's commitment to its shareholders to buy shares back when they stand at anything more than a small discount to NAV.

Dividend

Revenue generation for the full year ending 31st December 2017 is estimated to be somewhat lower than 2016. However, the buyback of a significant number of shares is likely to result in an increase in the earnings per share for the full year, notwithstanding the revenue decline. The Company is declaring an unchanged dividend of 2.25 pence per share for the first six months of this year, which will be payable on 5th October 2017 to shareholders on the register on 1st September 2017. The Board will consider the rate of the final dividend when the revenue for the full year is confirmed.

Gearing

Gearing at the period end was 9%, and has remained within the Board's strategic gearing level of 10%, plus or minus 2% throughout the period. Our fund manager has the ability to hold cash of up to 5% of net assets if he believes there is a real risk of capital loss and we have indicated that our highest level of gearing would be 20%. The Company has bank facilities totalling £65 million, together with a £50 million debenture. Since the debenture matures in June 2018, the Board is currently considering replacement options.

Board of Directors

Following 12 years of service to the Company, Sarah Bates retired as a Director on 26th July 2017, having previously stepped down as Chair at the Company's Annual General Meeting held in May 2017.

The Board and the Company have benefitted greatly over the years from Sarah's counsel, her determination to pursue shareholder returns, and her unrelenting diligence to protect shareholders' interests. On a personal note I have been grateful to Sarah for her gracious assistance in the handover of the Chair role since the Annual General Meeting.

Mr Robert Talbut was appointed to the Board with effect from 1st June 2017. Mr Talbut was, until 2014, the Chief Investment Officer of Royal London Asset Management and has over 30 years of financial services experience. He has represented the asset management industry through the chairmanship of both the ABI Investment Committee and the Asset Management Committee of the Investment Association. He has also been a member of the Audit & Assurance Council of the Financial Reporting Council and the Financial Conduct Authority's Listing Authority Advisory Panel. Robert is already making a significant contribution to the Board's deliberations.

Outlook

It is indisputable that the current economic cycle in the US is mature, certainly by comparisons with history. The Federal Reserve has begun to raise short term interest rates and is making an attempt to restore some kind of normality to monetary policy after the many years of unorthodox Quantitative Easing. Even so, Fed Chair Janet Yellen has indicated that prospective interest rate rises will likely be modest as the cycle proceeds.

Company profits will be under some pressure but expectations are that no major decline will occur. Equity valuations are high but not extreme by historic standards. Investors have to digest this environment against a background of the political and policy uncertainty that characterises the present White House. Taken together there must be an expectation that equity prices could be quite volatile from time to time over the forthcoming period. The investment process followed by our manager, Garrett Fish, is based on picking individual stocks and assembling them into a portfolio which has attractive characteristics compared to the overall market. While shareholders are inevitably exposed to the overall movements of the general equity market, the Board has confidence that over time the investment process pursued by the Manager will outperform our benchmark, the S&P 500 Index.

Dr Kevin Carter

Chair

3rd August 2017

Investment Manager's Report

Market Review

US equity markets experienced the strongest start to the year since 2013 in dollar terms, with the S&P 500 Index reaching its 26th new all-time high of 2017 on 19th June. The first six months of the year could be characterised by low levels of volatility and a reversal of market leadership from 2016. The energy, telecom services and financials sectors, which had been 2016's top performers became this year's laggards. Equities recovered in the final week of the first quarter as President Trump immediately shifted his focus to tax reform.

With enthusiasm diminishing over President Trump's ability to implement his aggressive agenda, investor focus returned to fundamentals. The reacceleration of global economic growth, which has been in place since the second half of last year, has been reflected in this year's earnings. First quarter S&P 500 earnings represent a 3.3% increase from the prior quarter and a 20.2% increase from the first quarter of 2016. First quarter earnings season marked the third consecutive quarter of year-over-year earnings growth after experiencing seven straight quarterly declines dating back to the fourth quarter of 2014.

Below average levels of volatility continued as the CBOE Volatility Index®, otherwise known as the VIX, fell to its lowest level since 1993 closing at 9.77 on 8th May. This is the fifth lowest reading of the volatility measure going back to its inception.

While volatility for the equity markets remained subdued in June, crude oil prices fell to their lowest level since August of last year and interest rates spiked in the quarter's final days. Despite attempts by OPEC and non-OPEC countries, including Russia, to limit production, increased US crude oil production placed pressure on prices. As crude oil prices recovered from their early 2016 low of USD26.21/bbl., US crude oil production has increased significantly. For the four weeks ending 23rd June, US production stood at 9.31 million barrels per day, an increase of 7.2% from a year ago.

As expected, the Federal Open Market Committee (FOMC) of the Federal Reserve (Fed) decided to raise interest rates by 0.25% to a range of 1.00% to 1.25%. The Fed expects to raise rates one more time this year and three times in 2018. Additionally, the FOMC for the first time released plans to reduce the size of its balance sheet which according to the June FOMC statement will begin 'this year'. Investors took the developments coming from the June FOMC meeting in their stride. However, investors perceived comments made by European Central Bank (ECB) President, Mario Draghi, and Bank of England (BoE) President, Mark Carney as 'hawkish', prompting a spike in bond yields. Draghi, in an optimistic speech, suggested that policy could be adjusted, while Carney stated that some removal of monetary stimulus may be warranted. As a result, sovereign bond yields rose across the globe. The yield on the US 10-year US Treasury bond rose from 2.14% to 2.31% in June's final week.

Performance

The Company's net asset value rose by 5.8% in total return terms over the first six months of 2017. The return was above the benchmark, the S&P 500 Index, which rose 3.9% in sterling terms. All three components of the portfolio contributed positively to performance during the first half of the year. The large cap portion of the portfolio benefitted from overweight positions in the technology and healthcare sectors whilst also benefitting from an underweight position in the energy sector. The small cap growth portion of the portfolio had a very strong rebound after a bout of underperformance in the year earlier period. This was driven by very robust earnings reports and an overweight position in the technology sector. Gearing also contributed positively as the increase in value of the portfolio over the first six months of the year was greater than the cost of the debt.

The portfolio benefitted from strong stock selection in the consumer discretionary sector. Within that sector, our overweight positions in both Restaurant Brands and McDonalds added value. McDonalds reported better-than-expected sales results and has benefitted from the wealth gains achieved among the low-end consumer. Restaurant Brands performed very well in the first half due to strong cost controls and better than expected year on year comparisons. It also announced the acquisition of Popeye's restaurant chain that was well received by the market place.

Within health care, overweight allocations to Humana and Aetna were among the largest contributors to performance. Shares in Humana outperformed during the period after the company released strong quarterly earnings results, driven largely by the outperformance of its retail segment. Additionally, better-than-expected Medical Loss Ratio trends also bolstered shares. Shares of Aetna increased during the period, as investors reacted favourably to the company's quarterly earnings as encouraging Medical Loss Ratio trends were supported by improved performance in its commercial segment and allowed the company to increase investment in its growth initiatives. The company also raised its FY17 guidance as it expects Medical Loss Ratios to continue to improve.

Our underweight position in the energy sector was helped by not owning shares of either Exxon Mobil or Chevron, the two largest companies in the sector. The fall in the oil price during the time period dragged down most of the companies in the sector. Two of our holdings, Apache and TechnipFMC, were not immune to this impact and they negatively impacted performance. We still have a favourable view on Apache as it ramps up production in its newest fields in West Texas. Even though the early signs of the merger between Technip and FMC are positive the fall in the oil price caused industry conditions to deteriorate and the share price also declined.

The portfolio benefitted from not holding any shares in General Electric as the shares have fallen due to disappointing financial returns from their individual business units. We find more attractively valued securities within the industrials sector and remain underweight the shares.

Within consumer staples, overweight positions in Walgreens Boots and Molson Coors Brewing were among the largest detractors in the sector. Shares of Walgreens Boots dropped during the period after the announcement of the proposed Amazon/Whole Foods Markets merger due to fears that Amazon may enter the pharmacy market, which would be a big headwind for the company. Shares of Molson Coors Brewing sold off following disappointing EBITDA guidance at the company's investor meeting. The company's valuation is very attractive and we continue to believe in upside to cost savings targets and better North America share trends.

Our lack of exposure to Facebook and Amazon detracted. While these are fine companies we believe that investors are paying a very dear price for the growth prospects of these companies. On the other hand, we believe the shares of Apple remain very attractive here even after a very strong start to the year. The shares of Apple performed well due to surprisingly positive results for its largest revenue generating product - the iPhone. Most investors expected a deceleration of orders due to the upcoming launch of the 10th anniversary iPhone in the second half of this year. This upgrade cycle is expected to be the largest yet.

Our overweight position in Qualcomm was the largest detractor to the portfolio. Qualcomm reported better than expected results for Q4 2016, but its guidance was slightly below investors' expectations. Additionally, the company addressed the recent Apple and FTC lawsuits, stating that Qualcomm does not expect any disruption to royalty payments from Apple's contract manufacturers despite the arbitration. In the meantime the shares underperformed due to this new round of legal uncertainty. While not pleasant news, the company has dealt successfully with similar lawsuits in the past.

With regards to our portfolio positioning, the Company is most overweight in health care, consumer staples and information technology sectors and has small overweight allocations in utilities and consumer discretionary. The health care sector is the largest overweight position, since there are several areas that are attractive right now due to the distraction of the health care related news from Washington and the underperformance over the last two years. The large cap biotechnology area continues to see new product introductions and the worries of price reductions has kept the share prices muted even though there is decent earnings growth. Also the managed care area, where two separate mergers were denied by the government, continues to refine their programs for the rapidly changing health care landscape. We view these companies as part of the solution to the health care issues in the US, not part of the problem. Furthermore the Company has its biggest underweights in real estate, industrials and materials. Within financials, our exposure is now in line with the benchmark.

As mentioned in the most recent Annual Report we undertook an analysis beginning last year to look at the impact of the purchases and sales as well as position sizes on the overall portfolio. The conclusion, as mentioned in the Annual Report, was that we would be reducing the number of securities in the large cap portion of the Company and this would lead to a subsequent increase in the Active Share. At the end of the calendar year there were 77 securities in the large cap portion of the Company and we ended June 2017 with 66 securities. The Active Share component has risen from 67.2 to 71.5 during the same time period. We now consider the implementation of these findings from this thorough analysis to be largely complete and are encouraged by the early results.

Finally, a comment on the level of gearing. The Company's level of gearing was 9% as of 30th June 2017 and thereby remains at the similar levels as it was six months ago. As always, we will look to add or trim our gearing on an opportunistic basis around the Board's strategic gearing level. If there is a compelling reason to do so, a decision to move outside the strategic gearing level of 10% with a 2% buffer on either side will be taken in consultation with the Board.

Market Outlook

Our fundamental outlook for continued US economic expansion and associated growth in corporate earnings remains intact. However, we would be remiss not to address the risks currently facing US equity markets. Higher equity valuations in the US, particularly for low volatility stocks, present some cause for concern. Rich valuations for low volatility and low beta equities have yet to be corrected. These high prices continue to pose risks for investors searching for yield in a still-low interest rate environment. In China, financial sector leverage has risen steadily in the past few years, although the debt burden is not as great as it has been in past cycles. Also of particular interest to investors is the impact of the Fed's interest rate hikes on the pace of economic growth. Other risks are whether any of the recommended policies from the new Presidential administration will be fully enacted. While there are risks the economy continues to grow at a very modest rate, inflation remains very low by historical standards and wage rates remain muted even with a very low unemployment rate.

Although the US economy is entering late cycle, we see a low risk of a recession in the near term, expecting earnings growth to remain on an upward trajectory. As prudent investors, we must be vigilant in identifying all potential sources of volatility. Central banks around the globe are beginning to signal the deceleration of their balance sheet expansion. The consequences for equity investors are somewhat unclear. We are encouraged by historically attractive equity valuations relative to the bond markets, but we also are wary of the unintended shocks and consequences from the ending of what is, after all, an unprecedented monetary experiment. Headlines coming out of Washington can create additional uncertainty as well. However, it is the confidence in our forecast for continued earnings growth that supports our view that equity markets can continue their upward trend.

Garrett Fish

Investment Manager

3rd August 2017

INTERIM MANAGEMENT REPORT

The Company is required to make the following disclosures in its half year report.

Principal Risks and Uncertainties

The principal risks and uncertainties faced by the Company remain unchanged and fall into the following broad categories: investment and strategy; market; accounting, legal and regulatory; corporate governance and shareholder relations; operational; financial; political and economic. Information on each of these areas is given in the Business Review within the Annual Report and Accounts for the year ended 31st December 2016.

Related Parties Transactions

During the first six months of the current financial year, no transactions with related parties have taken place which have materially affected the financial position or the performance of the Company.

Going Concern

The Directors believe, having considered the Company's investment objectives, risk management policies, capital management policies and procedures, nature of the portfolio and expenditure projections, that the Company has adequate resources, an appropriate financial structure and suitable management arrangements in place to continue in operational existence for the foreseeable future and, more specifically, that there are no material uncertainties pertaining to the Company that would prevent its ability to continue in such operation existence for at least twelve months from the date of the approval of this half yearly financial report. For these reasons, they consider there is reasonable evidence to continue to adopt the going concern basis in preparing the accounts.

Directors' Responsibilities

The Board of Directors confirms that, to the best of its knowledge:

(i)    the condensed set of financial statements contained within the half year financial report has been prepared in accordance with FRS 104 'Interim Financial Reporting' and gives a true and fair view of the state of affairs of the Company, and of the assets, liabilities, financial position and net return of the Company as at 30th June 2017 as required by the UK Listing Authority Disclosure and Transparency Rules 4.2.4R; and

(ii)   the interim management report includes a fair review of the information required by 4.2.7R and 4.2.8R of the UK Listing Authority Disclosure and Transparency Rules.

In order to provide these confirmations, and in preparing these financial statements, the Directors are required to:

•      select suitable accounting policies and then apply them consistently;

•      make judgements and accounting estimates that are reasonable and prudent;

•      state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

•      prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business;

and the Directors confirm that they have done so.

For and on behalf of the Board

Dr Kevin Carter
Chair

3rd August 2017

statement of Comprehensive income

for the six months ended 30th June 2017

	(Unaudited) Six months ended 30th June 2017			(Unaudited) Six months ended 30th June 2016 (Restated)			(Audited) Year ended 31st December 2016 (Restated)
	Revenue	Capital	Total	Revenue	Capital	Total	Revenue	Capital	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Gains on investments held at fair value through profit or loss	-	44,125	44,125	-	82,731	82,731	-	239,839	239,839
Net foreign currency gains/(losses)1	-	4,479	4,479	-	(6,876)	(6,876)	-	(12,859)	(12,859)
Income from investments	9,923	-	9,923	9,852	-	9,852	20,533	-	20,533
Interest receivable	66	-	66	43	-	43	77	-	77
Gross return	9,989	48,604	58,593	9,895	75,855	85,750	20,610	226,980	247,590
Management fee	(516)	(2,062)	(2,578)	(425)	(1,701)	(2,126)	(909)	(3,636)	(4,545)
Other administrative expenses	(354)	-	(354)	(360)	-	(360)	(802)	-	(802)
Net return on ordinary activities before finance costs and taxation	9,119	46,542	55,661	9,110	74,154	83,264	18,899	223,344	242,243
Finance costs	(430)	(1,719)	(2,149)	(388)	(1,549)	(1,937)	(803)	(3,213)	(4,016)
Net return on ordinary activities before taxation	8,689	44,823	53,512	8,722	72,605	81,327	18,096	220,131	238,227
Taxation	(1,382)	-	(1,382)	(1,363)	-	(1,363)	(2,909)	-	(2,909)
Net return on ordinary activities after taxation	7,307	44,823	52,130	7,359	72,605	79,964	15,187	220,131	235,318
Return per share (note 4)	2.94p	18.04p	20.98p	2.72p	26.83p	29.55p	5.70p	82.65p	88.35p

¹ Includes gains and losses on forward foreign currency contracts which are used to hedge the currency risk in respect of some of the geared portion of the portfolio. Details of the hedging contracts can be found in note 5.

As disclosed in note 9 in the half year report and accounts, certain comparatives have been restated.

The interim dividend declared in respect of the six months ended 30th June 2017 amounts to 2.25p (2016: 2.25p) per share, costing £5,314,000.

All revenue and capital items in the above statement derive from continuing operations. The return per share represents the profit per share for the period and also the total comprehensive income per share.

The 'Total' column of this statement is the profit and loss account of the Company and the 'Revenue' and 'Capital' columns represent supplementary information prepared under guidance issued by the Association of Investment Companies.

statement of changes in equity

for the six months ended 30th June 2017

	Called up		Capital
	share	Share	redemption	Capital	Revenue
	capital	premium	reserve	reserves1	reserve1	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Six months ended 30th June 2017 (Unaudited)
At 31st December 2016 (Restated)	14,082	151,850	8,151	788,012	23,121	985,216
Repurchase of shares into Treasury	-	-	-	(85,126)	-	(85,126)
Net return on ordinary activities	-	-	-	44,823	7,307	52,130
Dividends paid in the period	-	-	-	-	(6,801)	(6,801)
At 30th June 2017	14,082	151,850	8,151	747,709	23,627	945,419
Six months ended 30th June 2016 (Unaudited)
At 31st December 2015	14,082	151,850	8,151	622,025	20,592	816,700
Repurchase of shares into Treasury	-	-	-	(26,867)	-	(26,867)
Net return on ordinary activities	-	-	-	72,605	7,359	79,964
Dividends paid in the period	-	-	-	-	(6,729)	(6,729)
At 30th June 2016 (Restated)	14,082	151,850	8,151	667,763	21,222	863,068
Year ended 31st December 2016 (Audited)
At 31st December 2015	14,082	151,850	8,151	622,025	20,592	816,700
Repurchase of shares into Treasury	-	-	-	(54,144)	-	(54,144)
Net return on ordinary activities	-	-	-	220,131	15,187	235,318
Dividends paid in the period	-	-	-	-	(12,658)	(12,658)
At 31st December 2016	14,082	151,850	8,151	788,012	23,121	985,216

¹ These reserves form the distributable reserves of the Company and may be used to fund distribution of profits to investors via dividend payments.

As disclosed in note 9 in the half year report and accounts, certain comparatives have been restated.

statement of financial position

at 30th June 2017

	(Unaudited) 30th June 2017 £'000	(Unaudited) 30th June 2016 (Restated) £'000	(Audited) 31st December 2016 (Restated) £'000
Fixed assets
Investments held at fair value through profit or loss	1,030,369	931,390	1,068,848
Current assets
Derivative financial assets	695	-	358
Debtors	1,046	24,008	921
Cash and cash equivalents	13,955	14,901	10,114
	15,696	38,909	11,393
Current liabilities
Creditors: Amounts falling due within one year	(50,606)	(54,051)	(558)
Derivative financial liabilities	-	(3,238)	-
Net current (liabilities)/assets	(34,910)	(18,380)	10,835
Total assets less current liabilities	995,459	913,010	1,079,683
Creditors: Amounts falling due after more than one year	(50,040)	(49,942)	(94,467)
Net assets	945,419	863,068	985,216
Capital and reserves
Called up share capital	14,082	14,082	14,082
Share premium	151,850	151,850	151,850
Capital redemption reserve	8,151	8,151	8,151
Capital reserves	747,709	667,763	788,012
Revenue reserve	23,627	21,222	23,121
Shareholders' funds	945,419	863,068	985,216
Net asset value per share (note 5)	400.3p	323.6p	381.0p

As disclosed in note 9 in the half year report and accounts, certain comparatives have been restated.

Statement of Cash Flows

for the six months ended 30th June 2017

	(Unaudited) Six months ended 30th June 2017 £'000	(Unaudited) Six months ended 30th June 2016 (Restated) £'000	(Audited) Year ended 31st December 2016 (Restated) £'000
Net cash outflow from operations before dividends and interest	(3,561)	(1,176)	(3,241)
Dividends received	8,756	8,418	17,580
Interest received	73	43	70
Overseas tax recovered	31	65	64
Interest paid	(2,243)	(1,984)	(4,020)
Net cash inflow from operating activities	3,056	5,366	10,453
Purchases of investments	(215,725)	(166,661)	(313,586)
Sales of investments	298,045	201,796	370,087
Settlement of forward currency contracts	2,073	(3,861)	(11,753)
Net cash inflow from investing activities	84,393	31,274	44,748
Dividends paid	(6,801)	(6,729)	(12,658)
Repayment of bank loans	(3,858)	(7,633)	(41,283)
Drawdown of bank loans	12,081	971	44,627
Repurchase of shares into Treasury	(85,031)	(27,137)	(54,562)
Net cash outflow from financing activities	(83,609)	(40,528)	(63,876)
Increase/(decrease) in cash and cash equivalents	3,840	(3,888)	(8,675)
Cash and cash equivalents at start of period	10,114	18,789	18,789
Exchange movements	1	-	-
Cash and cash equivalents at end of period	13,955	14,901	10,114
Increase/(decrease) in cash and cash equivalents	3,840	(3,888)	(8,675)
Cash and cash equivalents consist of:
Cash and short term deposits	33	22	10
Cash held in JPMorgan US Dollar Liquidity Fund	13,922	14,879	10,104
Total	13,955	14,901	10,114

As disclosed in note 9 in the half year report and accounts, certain comparatives have been restated.

Notes to the Financial Statements

for the six months ended 30th June 2017

1.     Financial statements

The information contained within the financial statements in this half year report has not been audited or reviewed by the Company's auditors.

The figures and financial information for the year ended 31st December 2016 are extracted from the latest published financial statements of the Company and do not constitute statutory accounts for that year. Those financial statements have been delivered to the Registrar of Companies, including the report of the auditors which was unqualified and did not contain a statement under either section 498(2) or 498(3) of the Companies Act 2006.

2.     Accounting policies

The financial statements have been prepared in accordance with the Companies Act 2006, FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' of the United Kingdom Generally Accepted Accounting Practice ('UK GAAP') and with the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' (the revised 'SORP') issued by the Association of Investment Companies in November 2014 and updated in January 2017.

FRS 104, 'Interim Financial Reporting', issued by the Financial Reporting Council ('FRC') in March 2015 has been applied in preparing this condensed set of financial statements for the six months ended 30th June 2017.

All of the Company's operations are of a continuing nature.

The accounting policies applied to this condensed set of financial statements are consistent with those applied in the financial statements for the year ended 31st December 2016.

3.     Dividends paid¹

		(Unaudited)	(Unaudited)	(Audited)
		Six months ended	Six months ended	Year ended
		30th June 2017	30th June 2016	31st December 2016
		£'000	£'000	£'000
	Unclaimed dividends refunded to the Company	-	-	(2)
	Final dividend paid in respect of the year ended 31st December 2016 of 2.75p (2015: 2.5p)	6,801	6,729	6,728
	Interim dividend paid in respect of the six months ended 30th June 2016 of 2.25p	-	-	5,932
	Total dividends paid in the period/year	6,801	6,729	12,658

        ¹   All the dividends paid in the period have been funded from the Revenue Reserve.

An interim dividend of 2.25p has been declared in respect of the six months ended 30th June 2017, costing £5,314,000.

4.     Return per share

		(Unaudited) Six months ended 30th June 2017 £'000	(Unaudited) Six months ended 30th June 2016 (Restated) £'000	(Audited) Year ended 31st December 2016 (Restated) £'000
	Return per share is based on the following:
	Revenue return	7,307	7,359	15,187
	Capital return	44,823	72,605	220,131
	Total return	52,130	79,964	235,318
	Weighted average number of shares in issue	248,493,716	270,570,528	266,333,049
	Revenue return per share	2.94p	2.72p	5.70p
	Capital return per share	18.04p	26.83p	82.65p
	Total return per share	20.98p	29.55p	88.35p

5.     Net asset value per share

		(Unaudited) 30th June 2017 £'000	(Unaudited) 30th June 2016 £'000	(Audited) 31st December 2016 £'000
	Net assets	945,419	863,068	985,216
	Number of shares in issue	236,166,875	266,693,992	258,573,403
	Net asset value per share	400.3p	323.6p	381.0p

For further information, please contact:

Alison Vincent

For and on behalf of

JPMorgan Funds Limited, Secretary

020 7742 4000

Please note that up to date information on the Company, including daily NAV and share prices, factsheets and portfolio information can be found at www.jpmamerican.co.uk

Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.

JPMORGAN FUNDS LIMITED

ENDS

A copy of the Half Year Report has been submitted to the National Storage Mechanism and will shortly be available for inspection at www.morningstar.co.uk/uk/NSM

The Half Year Report will also shortly be available on the Company's website at www.jpmamerican.co.uk where up to date information on the Company, including daily NAV and share prices, factsheets and portfolio information can also be found.

 

END

 

 

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