Half Yearly Report

RNS Number : 4607V

JPMorgan American IT PLC

07 August 2015

 

LONDON STOCK EXCHANGE ANNOUNCEMENT

JPMORGAN AMERICAN INVESTMENT TRUST PLC

UNAUDITED HALF YEAR RESULTS

FOR THE SIX MONTHS ENDED 30TH JUNE 2015

Chairman's Statement

Results for the six month period

Despite considerable turmoil elsewhere and following the very strong returns seen last year, the Company's benchmark index provided a total return of 0.2% in sterling terms, for the six month period to 30th June 2015. Your fund manager delivered a total return of 0.5% which was just slightly ahead of the benchmark index. Garrett Fish covers the detail of the market background and his performance in his report. Six months is a short period: over the longer term, the market has provided strong returns and Garrett has outperformed the market over 1, 3, 5 and 10 years to 30th June 2015. The share price was weak, though, declining by over 5%. We believe this is largely the result of a marginal shift in investor demand as they trimmed positions in the US markets in favour of Europe and Asia. As a result your shares moved from a premium to a small discount. As we had previously indicated, we therefore bought back over five million shares over the period, recognising our obligations having issued shares at a premium in recent years. We will continue to recognise that obligation and the Board has been monitoring the discount very closely over the last few months to that end.

Dividend

US companies continued to provide a reasonably strong dividend flow and the income we received over the period again increased from the prior year. Taking that into account and in order to maintain a balance between the interim and final, the Company will be paying a dividend of 1.5 pence per share for the first six months of this year. This interim dividend will be payable on 9th October 2015 to shareholders on the register on 4th September 2015. The Board will consider the rate of the final dividend when the revenue for the full year is confirmed but the rate of increase for the interim dividend should not set an expectation in relation to the final dividend.

Gearing

Gearing has remained within the Board's strategic gearing level of 10%, plus or minus 2% over the reporting period. Our fund manager has the ability to hold cash of up to 5% of net assets if he feels there is a real risk of capital loss and we have indicated that our highest level of gearing would be 20%. As I explained in our report for the full year of 2014, we have developed a diversified gearing strategy in order to avoid having to refinance all our debt at a particular point, to alleviate the need to time a particular interest rate level and to maintain flexibility. In April 2015, the Company put in place an additional £25 million of flexible bank debt through a five year facility with National Australia Bank to ensure that the Board's strategic gearing level could be maintained. The Company now has bank facilities totalling £60 million, together with a £50 million debenture. Repayment dates for the bank debt are December 2016 and April 2020; the debenture matures in June 2018.

Share Issuance and Repurchases

In January, the Company issued 600,000 shares. The shares were issued at a premium to estimated NAV. In early February 2015, the Company's shares began trading at a consistent discount, having in the main traded at a premium over the prior three years. Accordingly, having monitored the discount level on a daily basis and worked closely with JPMorgan Asset Management and our brokers, the Board authorised the repurchase of a total of 5,080,499 shares into treasury over the reporting period. No further shares have been repurchased since the period end to the date of this report.

Operation of the Performance Fee

As part of the Board's continued attention to all fees and costs, we have considered the operation of the performance fee. From its introduction the fee has been based on the difference between the capital return of the net asset value and the capital return of the S&P 500 index. We believe that the broad structure of the fee remains in shareholders' interests as it is capped and has a mechanism to offset underperformance. However, we have amended the calculation slightly so that outperformance is measured in total return terms, which is better aligned with the returns experienced by shareholders. That is, the net asset value total return is compared with the total return provided by the S&P 500, both in sterling terms. We believe this is a better measure of performance and removes distortions which can be caused by retained income, particularly as our income receipts are rising. In our calculations for last year's performance fee we removed the retained income element from the capital calculation and have now put in place the new calculation with effect from 1st January 2015.

Outlook

It is particularly difficult to be confident about the direction of the US equity market at this stage. There is an expectation that interest rates will rise in the second half of the year - although expectations of rising interest rates have turned out not to be well founded over the last few years. It might be reasonable to expect some turbulence as rates rise, as even if equity markets would not on their own be too troubled, the impacts on bond markets might be significant. As we now know, sharp movements in any market tend to reveal a few flaws and tensions among participants in those markets.

However, the US market is not in very expensive territory, innovation seems to be persistent and inflation seems to be subdued. Our Manager (who is quite cautious by nature) is not currently arguing to reduce gearing. It is possible that US growth will strengthen over the rest of the year, and newsflow may surprise investors. The range of opportunities provided by the US market continues to be attractive.

Sarah Bates

Chairman                                                                                                                                                 

7th August 2015

Investment Manager's Report

Market Review

US equity markets were quite a roller coaster over the first six months of the year. Investors felt relief when crude oil prices began to rebound and the US dollar's appreciation began to slow down. Brisk merger and acquisition activity has also been supportive of equities. However, investor sentiment remained cautious as global currency and fixed income markets were quite volatile. As the quarter came to a close, fears surrounding Greece re-emerged. US equity markets sold off on the quarter's second to last trading day as Greece missed an approximate EUR1.5 billion payment to the International Monetary Fund (IMF). Large cap stocks as represented by the S&P 500 Index managed a small advance of 0.2%, while small cap stocks measured by the Russell 2000 Growth Index fared better with a gain of 7.7%, all in sterling terms.

Over the reporting period, May turned out to be the strongest month for the S&P 500 as US mergers and acquisitions activity hit an all-time monthly record, surpassing the previous highs seen during the peak of the dotcom bubble and the debt boom that eventually led to the 2008 financial crisis. The overall value of deals in the US amounted to USD243 billion in May compared to USD226 billion in May 2007 and USD213 billion in January 2000, the previous highest and second highest months, respectively.

Although headlines focused on Greece and China, recent economic releases point to a US economy accelerating from its 1st quarter lull. The June Employment Report wasn't spectacular, but it was solid. Non-farm payrolls grew by a healthy 223,000 in June, in line with the consensus estimate of 233,000. These payrolls numbers have continued the trend over the last three years of slow and steady progress on the employment front. The housing market and the US consumer are also seeing improving trends. While new home sales remain at low levels by historic standards, the pace of sales in May was the highest reported since February of 2008.

Within the market, growth is outperforming value as investors grapple with a continuation of the low economic growth scenarios around the world. The two sectors that stand out on the positive side are healthcare and consumer discretionary. Healthcare has been bolstered by strong product pipelines and a wave of M&A that has driven shares higher. With the decline in the price of oil, the US consumer has spent some of the incremental savings on new retail purchases and travel. The most interesting thing to note in this environment of significantly lower oil prices is that the US consumer has managed to increase their savings rate and not just spend this windfall due to the lower prices. Not surprisingly one of the weakest sectors in the year to date is the energy sector as profitability estimates have been slashed and companies are reacting as quickly as they can to adjust their cost structures lower.

Performance

The Company's net asset value rose by 0.5% in total return terms over the first six months of 2015. The return was ahead of the benchmark, the S&P 500 Index, which rose by 0.2% in sterling terms. When reviewing the portfolio's performance, our exposure to small cap growth was the main contributor to performance over the time period as investors searched for more sustainable growth investments. In general terms both stock and sector selection marginally added value for the six month period under review.

Specifically, the portfolio benefitted from strong stock selection in the health care and industrials sectors. Within health care, our overweight positions in both Anthem and Cigna added value. The health benefits company Anthem, formerly known as WellPoint, rallied early in the year after it announced it has closed the acquisition of Simply Healthcare, a Florida managed care operator focused on the Medicaid and Medicare Advantage markets. The company also issued robust earnings in May that heralded strong membership numbers. The company's growth continues to be balanced with contributions from both the commercial and government segments. Additionally execution remains strong as does the company's pipeline of future revenue growth. Most recently, they have held merger talks with Cigna. This information caused Cigna to rally strongly during the latter part of the period. Our position in Cigna ensured that we benefitted from this rally though the company has also had a strong record of earnings per share (EPS) beats in 2014 and running into 2015 as well as raising full year guidance for 2015, which was small but encouraging so early in the year. In the industrials sector, an overweight position in Northrop also contributed. Northrop started 2015 on a positive note, providing profit guidance for 2015 that topped Wall Street expectations with the defence contractor reporting strong 4Q2014 earnings. Additionally, it continued this strength with 1Q2015 earnings, with sales slightly better in all segments driving 2% top line growth and reported improved guidance for the full year and higher-than-expected pension income. A lack of exposure to Union Pacific also contributed in the sector. Earnings showed that the decline in coal volumes, which is a major part of Union Pacific's revenues, was worse than anticipated as intermodal volumes were challenged by a strike in West Coast Ports. Additionally, Union Pacific also disappointed on cost control.

On the positive side in technology, our large overweight in Apple helped the portfolio performance. Apple reported very strong Q4 and Q1 earnings results due to the immense popularity of their latest iPhone models with the larger screens and faster processors. Apple has reaccelerated its earnings growth and has also expanded its share repurchase and dividend programs. In contrast, overall our stock selection in the information technology and consumer discretionary positioning disappointed. Our information technology performance was hindered by overweight positions in SanDisk and Hewlett-Packard. SanDisk detracted from performance after the company guided revenues lower than expected primarily due to product qualification delays, lower than expected sales of enterprise products and lower pricing in some areas of the business. Hewlett-Packard disappointed as structural problems undermined performance as declining PC, printer and server demand pushed shares lower. Also in the sector, an overweight position in KLA-Tencor detracted from performance after guiding lower for the full year 2015. The company lowered guidance believing that semi-cap equipment orders are being pushed out into the 2H2015 with potential to slip into 2016. We remain overweight the company as we believe that leading edge technology (14nm) and more difficult implementations should still benefit KLA-Tencor in the longer-term.

In the telecom services sector, an overweight position in CenturyLink was the largest detractor. The integrated communications company posted weak results early in the year with total revenue falling year-on-year. The decline in revenue was driven by weakness in data centre hosting revenue with flat growth in TV and broadband also hurting. Operating metrics though remain on track and we maintain confidence in the name.

With regards to our portfolio positioning, our largest overweight remains in the information technology sector. We find technology to be a fertile ground for stock picking, supported by its valuation and free cash flow. We are overall optimistic on the technology sector, with a broadly diversified exposure to semiconductors, semi cap equipment, data processing and computer hardware. Our main underweights are the materials and utilities sectors, as we are less excited about the long term growth prospects of both sectors as well as their unappealing valuation levels relative to other sectors.

Finally, a comment on the level of gearing over time. The Company's level of gearing at 9.4% as of 30th June 2015 is relatively unchanged from 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 will be taken in consultation with the Board.

Market Outlook

Employment trends continue to show slow, steady growth and the cyclical areas of the US economy continue to improve from their depressed levels of a few years ago. Consumer confidence has also rebounded as consumers are more able to enjoy the benefits of this economic recovery. The second quarter earnings season is quickly approaching. We are optimistic that earnings may improve as economic growth has rebounded from the tepid 1st quarter pace, while the US dollar and oil prices have stabilized. Given risks present overseas, such as in Greece and increasing concerns over Chinese equity markets, volatility could be here for some time. The noise around the Federal Reserve's initial interest rate increase will have to be dealt with over the next few months as well. However, a US economy which is expanding, along with continued stability in the US dollar and oil prices, gives us optimism that equity markets can regain their upward trend.

Garrett Fish

Investment Manager                                                                                                                                

7th August 2015

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 2014.

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 yearly financial report has been prepared in accordance with the Accounting Standards Board's Statement 'Half Yearly Financial Reports' 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 2015, 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

Sarah Bates

Chairman                                                                                                                                                 

7th August 2015

Statement of Comprehensive Income

for the six months ended 30th June 2015

	(Unaudited)			(Unaudited)			(Audited)
	Six months ended			Six months ended			Year ended
	30th June 2015			30th June 2014			31st December 2014
	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	-	139	139	-	23,586	23,586	-	139,248	139,248
Net foreign currency gains/(losses)1	-	574	574	-	2,168	2,168	-	(4,884)	(4,884)
Income from investments	9,162	-	9,162	7,131	-	7,131	15,228	-	15,228
Gross return	9,162	713	9,875	7,131	25,754	32,885	15,228	134,364	149,592
Management fee	(435)	(1,742)	(2,177)	(353)	(1,412)	(1,765)	(743)	(2,974)	(3,717)
Performance fee2	-	(246)	(246)	-	(469)	(469)	-	(359)	(359)
Other administrative expenses	(357)	-	(357)	(233)	-	(233)	(647)	-	(647)
Net return/(loss) on ordinary
activities before finance costs
and taxation	8,370	(1,275)	7,095	6,545	23,873	30,418	13,838	131,031	144,869
Finance costs	(376)	(1,506)	(1,882)	(361)	(1,444)	(1,805)	(765)	(3,061)	(3,826)
Net return/(loss) on ordinary
activities before taxation	7,994	(2,781)	5,213	6,184	22,429	28,613	13,073	127,970	141,043
Taxation	(1,177)	-	(1,177)	(1,195)	-	(1,195)	(2,661)	-	(2,661)
Net return/(loss) on ordinary
activities after taxation	6,817	(2,781)	4,036	4,989	22,429	27,418	10,412	127,970	138,382
Return/(loss) per share (note 4)	2.43p	(0.99)p	1.44p	1.82p	8.18p	10.00p	3.76p	46.24p	50.00p

¹Includes 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.

²During the period ended 30th June 2015, the Company's net asset value total return outperformed the total return of the S&P 500 Index, expressed in sterling terms, by 0.3 percentage points. This resulted in a positive performance fee calculation accrual of £246,000 in respect of the period ended 30th June 2015. Further details on the fee are given on the features page at the front of the Company's Half Year Report for the six months ended 30th June 2015.

The interim dividend declared in respect of the six months ended 30th June 2015 amounts to 1.5p (2014: 1.0p) per share, costing £4,148,000.

All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued in the period.

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

	Called up		Capital
Six months ended	share	Share	redemption	Capital	Revenue
30th June 2015	capital	premium	reserve	reserves1	reserve1	Total
(Unaudited)	£'000	£'000	£'000	£'000	£'000	£'000
At 31st December 2014	14,052	150,172	8,151	613,646	18,129	804,150
Issue of ordinary shares net of costs to
the market	30	1,678	-	-	-	1,708
Net return on ordinary activities	-	-	-	(2,781)	6,817	4,036
Repurchase of shares into Treasury	-	-	-	(14,414)	-	(14,414)
Dividends paid in the period	-	-	-	-	(6,304)	(6,304)
At 30th June 2015	14,082	151,850	8,151	596,451	18,642	789,176
	Called up		Capital
Six months ended	share	Share	redemption	Capital	Revenue
30th June 2014	capital	premium	reserve	reserves1	reserve1	Total
(Unaudited)	£'000	£'000	£'000	£'000	£'000	£'000
At 31st December 2013	13,411	119,791	8,151	485,676	15,184	642,213
Issue of ordinary shares net of costs to
the market	430	19,729	-	-	-	20,159
Net return on ordinary activities	-	-	-	22,429	4,989	27,418
Dividends paid in the period	-	-	-	-	(4,676)	(4,676)
At 30th June 2014	13,841	139,520	8,151	508,105	15,497	685,114
	Called up		Capital
Year ended	share	Share	redemption	Capital	Revenue
31st December 2014	capital	premium	reserve	reserves1	reserve1	Total
(Audited)	£'000	£'000	£'000	£'000	£'000	£'000
At 31st December 2013	13,411	119,791	8,151	485,676	15,184	642,213
Issue of ordinary shares net of costs to
the market	641	30,381	-	-	-	31,022
Net return on ordinary activities	-	-	-	127,970	10,412	138,382
Dividends paid in the year	-	-	-	-	(7,467)	(7,467)
At 31st December 2014	14,052	150,172	8,151	613,646	18,129	804,150

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

Statement of Financial Position

at 30th June 2015

	(Unaudited)	(Unaudited)	(Audited)
	30th June 2015	30th June 2014	31st December 2014
	£'000	£'000	£'000
Fixed assets
Investments held at fair value through profit or loss	860,089	747,015	875,701
Cash equivalents (including liquidity funds) at
fair value through profit or loss1	9,497	10,280	11,234
	869,586	757,295	886,935
Current assets
Derivative financial assets (note 5)	2,959	1,078	-
Debtors	1,548	1,140	776
Cash and short term deposits	24	23	3
	4,531	2,241	779
Creditors: amounts falling due within one year	(1,080)	(24,083)	(1,808)
Derivative financial liabilities (note 5)	-	-	(1,529)
Net current assets/(liabilities)	3,451	(21,842)	(2,558)
Total assets less current liabilities	873,037	735,453	884,377
Creditors: amounts falling due after more than one year	(83,452)	(49,884)	(79,720)
Performance fees	(409)	(455)	(507)
Net assets	789,176	685,114	804,150
Capital and reserves
Called up share capital	14,082	13,841	14,052
Share premium	151,850	139,520	150,172
Capital redemption reserve	8,151	8,151	8,151
Capital reserves	596,451	508,105	613,646
Revenue reserve	18,642	15,497	18,129
Shareholders' funds	789,176	685,114	804,150
Net asset value per share (note 6)	285.4p	247.5p	286.1p

¹This line item was shown as 'Investment in liquidity fund held at fair value through profit or loss' in the financial statements for the year ended 31st December 2014.

Statement of Cash Flows

for the six months ended 30th June 2015    

	(Unaudited)	(Unaudited)	(Audited)
	Six months ended	Six months ended	Year ended
	30th June 2015	30th June 2014	31st December 2014
	£'000	£'000	£'000
Cash inflow from operations (note 7)	5,192	3,896	8,085
Interest paid	(1,898)	(1,837)	(3,709)
Overseas tax recovered	101	11	11
Net cash inflow from operating activities	3,395	2,070	4,387
Purchases of equity investments and derivatives	(219,766)	(152,583)	(252,234)
Sales of equity investments and derivatives	234,587	127,942	213,841
Other capital charges	(3)	(4)	(8)
Net purchase of Time Deposits	-	(5)	(5)
Net cash inflow/(outflow) from investing activities	14,818	(24,650)	(38,406)
Dividends paid	(6,304)	(4,676)	(7,467)
Repayment of bank loans	(5,859)	-	-
Draw down of bank loans	10,079	7,036	11,173
Issue of ordinary shares	1,708	19,889	30,998
Repurchase of ordinary shares	(14,414)	-	-
Net cash (outflow)/inflow from financing activities	(14,790)	22,249	34,704
Increase/(decrease) in cash and cash equivalents	3,423	(331)	685
Cash and cash equivalents at the start of the period	10,329	8,504	8,504
Exchange movements	(4,231)	2,130	1,140
Cash and cash equivalents at the end of the period	9,521	10,303	10,329
Net movements in cash and cash equivalents	3,423	(331)	685
Cash and cash equivalents consist of:
Cash at bank	24	23	3
Bank overdraft	-	-	(908)
Investments in liquidity funds	9,497	10,280	11,234
	9,521	10,303	10,329

Notes to the Financial Statements

for the six months ended 30th June 2015

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 2014 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 and included 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.

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 2015.

As a result of the first time adoption of FRS 102 and the revised SORP, comparative numbers and presentational formats have been restated where required.

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 2014 with the following exceptions and amendments:

Finance costs

Finance costs are accounted for on an accruals basis using the effective interest rate method in accordance with the provisions of FRS 102.

Financial instruments

Cash and cash equivalents may comprise cash (including demand deposits which are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value) as well as cash equivalents, including liquidity funds. In accordance with the requirements of the Alternative Investment Fund Managers Directive regulations, investments are regarded as cash equivalents if they meet all of the following criteria; highly liquid investments held in the sub-fund's base currency that are readily convertible to a known amount of cash, are subject to an insignificant risk of change in value and provide a return no greater than the rate of a three-month high quality government bond.

Foreign currency

In accordance with FRS 102 the Company is required to identify its functional currency, being the currency of the primary economic environment in which the Company operates. The Board, having regard to the currency of the Company's share capital and the predominant currency in which its shareholders operate, has determined that sterling is the functional currency. Sterling is also the currency in which the accounts are presented.

Taxation

Current tax is provided at the amounts expected to be paid or received.

Deferred tax is accounted for in accordance with FRS 102.

Dividends payable

In accordance with FRS 102 the final dividend is included in the accounts in the year in which it is approved by shareholders.

Only the relevant section of the applicable policies from the last year end accounts which have changed as a result of the application of the revised SORP and FRS 102 have been reproduced above - all other aspects of those policies remain the same. The impact of the changes is substantially in relation to presentational, disclosure and non-quantifiable aspects.

3.   Dividends

	(Unaudited)	(Unaudited)	(Audited)
	Six months ended	Six months ended	Year ended
	30th June 2015	30th June 2014	31st December 2014
	£'000	£'000	£'000
Final dividend paid in respect of the year ended
31st December 2014 of 2.25p (2013: 1.7p)	6,304	4,676	4,676
Interim dividend paid in respect of the six months ended
30th June 2014 of 1.0p	-	-	2,791
Total dividends for the period1	6,304	4,676	7,467

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

An interim dividend of 1.5p has been declared in respect of the six months ended 30th June 2015, costing £4,148,000.

4.   Return/(loss) per share

	(Unaudited)	(Unaudited)	(Audited)
	Six months ended	Six months ended	Year ended
	30th June 2015	30th June 2014	31st December 2014
	£'000	£'000	£'000
Return/(loss) per share is based on the following:
Revenue return	6,817	4,989	10,412
Capital (loss)/return	(2,781)	22,429	127,970
Total return	4,036	27,418	138,382
Weighted average number of shares in issue	279,968,588	274,256,822	276,739,581
Revenue return per share	2.43p	1.82p	3.76p
Capital (loss)/return per share	(0.99)p	8.18p	46.24p
Total return per share	1.44p	10.00p	50.00p

5.   Derivative financial instruments

The Company has hedged against the currency risk arising from its £50 million debenture liability. The forward currency contracts settled on 14th July 2015 and are for the purpose of hedging the risk of fluctuation in the £/US$ exchange rate. Upon maturity, these contracts were rolled over and the settlement date of these new contracts is 19th October 2015. These contracts continue to be rolled over on a quarterly basis.

6.   Net asset value per share

      Net asset value per share is calculated by dividing the funds attributable to ordinary shareholders by the number of ordinary shares in issue at 30th June 2015 of 276,553,411 (30th June 2014: 276,818,910 and 31st December 2014: 281,033,910).

7.   Reconciliation of total return on ordinary activities before finance costs and taxation to net cash inflow from operating activities

	(Unaudited)	(Unaudited)	(Audited)
	Six months ended	Six months ended	Year ended
	30th June 2015	30th June 2014	31st December 2014
	£'000	£'000	£'000
Net return on ordinary activities before finance
costs and taxation	7,095	30,418	144,869
Add: capital loss/(Less: capital return) before
finance costs and taxation	1,275	(23,873)	(131,031)
Scrip dividends received as income	-	(4)	(4)
Decrease/(increase) in net debtors and accrued income	6	(22)	(166)
Increase in accrued expenses	169	136	45
Overseas withholding tax	(1,267)	(1,049)	(2,518)
Management and performance fee charged to capital	(1,988)	(1,881)	(3,333)
(Decrease)/increase in performance fee provision	(98)	171	223
Net cash inflow from operating activities	5,192	3,896	8,085

8.   Fair valuation of investments

The fair value hierarchy analysis for investments held at fair value at the period end is as follows:

	(Unaudited)		(Unaudited)		(Audited)
	Six months ended		Six months ended		Year ended
	30th June 2015		30th June 2014		31st December 2014
	Assets	Liabilities	Assets	Liabilities	Assets	Liabilities
	£'000	£'000	£'000	£'000	£'000	£'000
Quoted prices for identical instruments in active markets	858,951	-	745,968	-	874,553	-
Prices of recent transactions for identical instruments1	9,497	-	10,280	-	11,234	-
Valuation techniques using non-observable data2	1,138	-	1,047	-	1,148	-
Total value of investments	869,586	-	757,295	-	886,935	-

¹Include liquidity funds.

²Include unquoted stock of Kane holdings.

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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