Annual Financial Report

RNS Number : 6794R

JPMorgan Claverhouse IT PLC

10 March 2016

 

LONDON STOCK EXCHANGE ANNOUNCEMENT

JPMORGAN CLAVERHOUSE INVESTMENT TRUST PLC

FINAL RESULTS FOR THE YEAR ENDED 31ST DECEMBER 2015

The Directors of JPMorgan Claverhouse Investment Trust plc announce the Company's results for the year ended 31st December 2015.

Chairman's Statement

Performance and Manager Review

I am very pleased to present my first annual statement as Chairman of the Company. The year to 31st December 2015 was another positive one for investors in the UK equity market, albeit marginal at +1%. Such an apparently steady return does not give an indication of the level of intra-year volatility within the market and our Investment Managers provide more detail in their report which follows.

I can report that for the fourth successive year the Company has outperformed its benchmark index, both in terms of Net Asset Value ('NAV') per share and share price. The return on net assets, taking capital growth and income together, of the UK stock market as measured by the Company's benchmark, the FTSE All-Share Index, was +1.0%. The Company's total return on net assets was significantly better at +6.0%. The share price at the year end was identical as at the previous year end, at 602.5p. This is because, despite the rise in the NAV over the year, the discount of the share price to NAV (calculated using the capital-only NAV, with debt at par) widened, from 3.4% to 5.9%, and the total return to shareholders for the year was +3.6%.

The Board is very pleased that the Company's significantly improved performance has been sustained through 2015, building further on the excellent longer term performance record that has been established following the detailed review of the investment process that was undertaken in early 2012 and the resultant changes that were made. Over the 46 months since those changes were implemented, the Company has produced a total return on net assets of +53.3% and a share price total return of +61.1%, compared with the benchmark total return of +29.4%. This excellent performance is great credit to our Investment Managers, William Meadon and Sarah Emly. The Company's longer term performance record is strong; the NAV total return has significantly outperformed the benchmark over three, five and ten years.

Numis Securities Limited was appointed as the Company's corporate broker in June 2015. The Board, with support from Numis and JPMF, seeks to ensure that the Company's longer term performance record is recognised by the market and the Board continues to believe that, under orderly market conditions, this record should assist in improving the Company's rating, in terms of the discount to NAV at which the shares trade.

Revenue and Dividends

In 2015 the revenue per share increased by 11.1% to 25.89p per share. The Board decided that the total dividend for the year should be increased from 20.0p to 21.5p, a rise of 7.5%, significantly above inflation and thus growing the total dividend for the 43rd successive year. The dividend was more than covered by the revenue generated by the Company's portfolio, which included several special dividends, and this allowed us again to make a modest transfer to the Company's revenue reserve. It remains the Board's aim to increase the dividend each year and, taking a run of years together, we continue to aspire to deliver increases in dividends that will at least match the rate of inflation. The Board is well aware that the outlook for dividend income in the coming years is mixed. However, it reiterates that it does not wish to see the Investment Managers constrained by the need to generate income; the Board remains prepared to utilise the Company's revenue reserve to support the dividend should it be necessary.

Gearing

Taking account of borrowings, net of cash balances held, and hedging through the use of Index Futures, the Company ended the year approximately 12.8% geared. During the year the gearing varied between 10.6% and 15.6%. Gearing existed by way of a combination of the £30 million 7% 2020 debenture and a revolving credit facility of £50 million, of which £45 million was drawn at the year end. As reported in previous years, the Board has agreed with the Investment Managers that gearing of 10% is considered as 'normal' and that they have discretion to vary the tactical level of gearing in a range of +/- 7.5% around that normal level, with maximum total gearing under normal market conditions of 20%. The tactical range of +/- 7.5% on top of the normal 10% is kept under review and any move outside of that range requires the Board's prior consent. However, as reported on the Features page of the annual report, the Company's formal overall policy remains to operate within the limits of a range of 5% net cash to 20% geared in normal market conditions.

The Investment Managers are permitted to use Index Futures as a tool with which to manage the level of exposure to the market and the level of gearing. The use of futures obviates the need to sell stocks and has less of an effect on the Company's income account than would significant variations in the level of conventional debt. Futures are only used for portfolio management purposes and exposure is limited automatically by the gearing limits within which the portfolio is managed.

Discount and Share Repurchases

During the year the discount on the Company's shares (based on the capital-only NAV, with debt at par) ranged between 2.0% and 9.1%, averaging 6.0%. The Company did not repurchase any shares during the year and none have been repurchased since January 2012. However, the Board continues to monitor the discount closely and is prepared to repurchase shares when it feels that it is appropriate, taking into account market conditions and whether the Company's discount is significantly out of line with its peers. Those shares repurchased in previous years are held in Treasury for possible re-issue should the Company's shares move to a premium.

Board of Directors

I succeeded Sir Michael Bunbury as Chairman of the Company following the AGM in April 2015. John Scott has indicated his intention to step down from the Board at the conclusion of the 2017 AGM.

The Directors conduct an assessment of the performance of the Board and its committees, as well as their own performance, each year and this is normally supplemented by one-to-one meetings with me. The Chairman's performance is assessed by the Senior Independent Director after he has consulted with all of the other Directors. A report is made to the Nomination Committee which meets annually to consider the results of the evaluation exercises. As a result of that evaluation process, I can confirm that all Directors will stand for reappointment at the forthcoming AGM.

Board Apprentice

As reported in last year's Chairman's Statement, we agreed to participate in an initiative developed by a not-for-profit company, Board Apprentice, and have appointed Sharon Mavin, Director of Roehampton Business School in London, as our apprentice, on an unpaid basis, to shadow the Board in order to gain experience of the workings of a company at board level.

Both the Board and Sharon have found this to be a worthwhile initiative. Although Sharon's appointment was intended to be for 12 months, we have agreed to extend her appointment until November this year, at which time the Board expects to appoint another apprentice for a minimum 12 months' period.

Annual General Meeting

This year's AGM will be held at JPMorgan's office at 60 Victoria Embankment, London EC4Y 0JP on Wednesday 20th April 2016 at 12.00 noon. William Meadon will give a presentation to shareholders, reviewing the past year and commenting on the outlook for the current year. The meeting will be followed by a sandwich lunch, thus providing shareholders with the opportunity to meet the Directors and representatives of the Manager. We look forward to seeing as many shareholders as possible at the AGM.

Outlook

Since the year end there has been marked volatility in stock markets worldwide, including the UK. The concerns and challenges are well-known: slowing economies in China and some other Asian countries; low growth in many countries, low inflation and low interest rates; and geo-political uncertainties, particularly in Europe and the Middle East.

Notwithstanding these concerns, the UK economy continues to grow faster than most economies in the developed world and UK corporate balance sheets remain generally strong. At a time when dividend income from UK stocks is forecast to be lower in 2016 than last year, the good stewardship of your Company has resulted in accumulated revenue reserves greater than the amount of last year's total dividend, which will provide a cushion against possible reductions in dividend income from the Company's portfolio.

Claverhouse remains positioned as a core investment vehicle investing in London-listed companies which the Investment Managers consider to be reasonably valued, well-managed and well-financed. Although the current economic uncertainties are likely to produce considerable volatility in share prices over the coming months, most investors in equities take a medium to long-term investment view. History shows the importance for long-term shareholders of remaining invested through volatile markets.

The economic uncertainties over the coming months are likely in the UK to be exacerbated by the political uncertainties surrounding the referendum on continued EU membership, which has now been set for 23rd June 2016. It is by no means clear at the time of writing what the outcome of the referendum will be. The impact of an 'Out' vote on the Company, a sterling-denominated fund investing in London-listed companies, albeit many with international businesses, could be significant but the Company is in no different position from other similar investors. The Investment Managers will take such steps as they properly and reasonably can, in the periods leading up to and after the referendum, to manage the risks and seek out potential opportunities whatever the outcome of the referendum.

All of my fellow Directors and I look forward to meeting shareholders at the AGM and discussing the prospects further at that time.

Andrew Sutch

Chairman                                                                                                                                        

10th March 2016

Investment Managers' Report

Market Review

The UK stock market, as measured by the FTSE All-Share Index, delivered a modestly positive total return of +1.0% in the 12 months to 31st December 2015. Mid cap companies significantly outperformed their small and large cap peers, with the FTSE Mid 250 index delivering a total return of +11.2%, while the FTSE 100 returned

-1.3% and the FTSE Small Cap index returned +9.2%. As in 2014, the market's positive return was entirely generated by dividend income. The capital value of the FTSE All-Share Index delivered a return of -2.5%, thus demonstrating again the importance of dividends to total returns.

The UK economy continued to grow at a reasonable rate (GDP +2.2%), making it one of the fastest growing in the developed world. Unemployment fell to a six year low of 5.4% and consumer confidence continued to improve on the back of low interest rates and an improving housing market. The slump in commodity prices, particularly in the second half of the year, ensured that inflation remained low and that base rates remained unchanged at 0.5% for yet another year. Falling inflation expectations were reflected in low gilt yields, with 10 year gilts yielding just 2.0% by the end of 2015.

The equity market started the year well with investors taking heart from continuing strong UK growth and encouraging signs of a nascent recovery in continental Europe. House prices rose in the wake of the success of the Conservatives in gaining an overall majority in the May General Election. A pick-up in industrial production suggested the economy was gathering momentum in the second quarter. Labour market conditions continued to improve throughout the period, with unemployment falling further to 5.5%, the lowest level since 2008, and wages rose at their fastest pace since August 2011.

However, overseas worries came to the fore over the summer with Greece back in focus, as hopes faded that it would reach an agreement with its creditors ahead of a crucial deadline. In the autumn, investor woes were compounded by a series of clumsy interventions by the Chinese authorities in both their stock and foreign exchange markets. The subsequent volatile reaction of the Chinese stock market had a ripple effect across global markets. The failure of OPEC to reach an agreement on a capped level of output led to oil prices falling, like other commodity prices, into a vertiginous slump. At year end, a barrel of Brent crude cost $37, a fall of 55% over the year.

Performance Review

In the year to 31st December 2015 the Company delivered a total return on net assets (capital plus dividends reinvested) of +6.0%, ahead of the benchmark FTSE All-Share Index, which delivered a return of +1.0%. A detailed breakdown of the performance is given in the annual report to be published shortly. Stock selection was again positive over the year.

It is pleasing to report that over the three years to 31st December 2015, the Company's NAV total return has outperformed that of the benchmark total return by +5.5% per annum, which is ahead of our outperformance objective of +2.0% per annum.

Imperial Tobacco was again a significant contributor to performance over the year. In an increasingly uncertain economic environment the company's visibility of both earnings and dividend growth is reassuring to us and, with a premium yield, still looks very good value. Another long term holding, the broadcaster ITV, announced a fifth consecutive year of double digit profit growth and increased its annual dividend by 36%, whilst also returning part of its strong cash generation to shareholders through a third consecutive special dividend. This stock remains attractive both in terms of its valuation and its ability to beat market expectations. Jupiter Fund Management also performed well, increasing its regular dividend strongly whilst also paying a special dividend.

Other successful stocks included a number of our housebuilding and property related stocks including Taylor Wimpey, Berkeley Group and Bellway, all of which announced good results, but also benefited from the positive sentiment towards the domestic cyclical stocks following the general election result.

By contrast, the biggest detractor from performance was the underweight position in BG Group which received a takeover approach from Royal Dutch Shell in early April. Our holding in the leading iron ore producer, Rio Tinto performed poorly over the year, as it suffered from collapsing commodity prices. The portfolio did, however, benefit from avoiding the very worst performers in the mining sector such as Glencore, which fell over 65% during the year.

Overall, against a fairly flat return on the index, 2015 was another satisfactory year of performance for JPMorgan Claverhouse. We continue to manage the portfolio within fairly tight risk controls, believing that such an approach will produce more consistent medium term returns for our shareholders.

Portfolio Review

New holdings introduced during the period included Fever Tree, the leading player within the premium segment of the £7.7 billion global mixer market. Based on the premise that premium spirits should be consumed with premium quality mixers, co-founders Charles Rolls and Tim Warrilow developed a mixer brand centred around the quality and provenance of its ingredients. The company has a range of 12 premium mixers, led by its Indian Tonic Water, which accounts for 45% of sales. Its products are now available in 50 countries with 70% of Group revenue coming from overseas. Having started buying the stock at £4.00 it was pleasing that it had already reached £6.00 per share by the year end.

We also bought into the chemicals group Synthomer, which has a new management team focused on driving strong shareholder returns. Throughout the year we continued to reduce our exposure to the mining sector, selling out of BHP Billiton and reducing our exposure to Rio Tinto, which was our only holding in the sector at the year end.

Top Over and Under-weight positions vs FTSE All Share Index

Top Five Overweight Positions		Top Five Underweight Positions
ITV	+2.2%	HSBC	-1.8%
Dixons Carphone	+2.2%	Diageo	-1.8%
Imperial Tobacco	+1.9%	National Grid	-1.8%
Micro Focus International	+1.8%	Royal Dutch Shell	-1.4%
BT Group	+1.6%	Compass	-1.0%

Source: JPMAM, as at 31st December 2015.

The Company's portfolio is constructed principally from bottom-up stock selection; our sector and macro views have a lesser influence on the portfolio. We aim to run a stock focused but sector diversified portfolio. The portfolio held 68 stocks at the year end.

We kept gearing levels in the low teens for most of the year but reduced it to 12.8% by year end, reflecting our more cautious views on markets and the fewer number of attractive stock opportunities. We occasionally use FTSE 100 futures to hedge the portfolio.

Market Outlook

We continue to live in a world of low numbers: growth, inflation and consequently interest rates are all likely to remain at historically low levels for the foreseeable future. Too many economies are reliant on debt, quantitative easing and low interest rates to be regarded as healthy. Whilst the UK economy continues to be one of the fastest growing in the developed world, it still depends too much on domestic consumption, rather than manufacturing and exports, for its growth. With China and other Far East economies slowing, the recent rise in US interest rates is likely to be the global exception.

Geo-politically, the refugee crisis in Europe remains a very significant challenge and may well test the political unity of Europe to its limit. The emotion generated by it may well be key in determining the outcome of the looming 'Brexit' vote. An 'out' vote will be a real game changer, for which there is no real precedent. Until the outcome is known, sterling is likely to be weak.

Whilst we take comfort from the strong balance sheets of most UK companies, we expect the increasing political, geo-political and global economic uncertainties to make markets more turbulent in the year ahead. Equities have certainly been volatile so far in 2016, driven as much by sentiment as any deterioration in underlying fundamentals. As a closed end fund we are, however, in a good position to use such volatility to our shareholders' advantage.

Irrespective of the short term movements of share prices, the security of the Company's dividend remains solid, benefiting from the substantial revenue reserves that have been accumulated during more benign times. This secure income will hopefully provide some comfort to shareholders until the investment skies clear.

Gearing at the year end was 12.8% and is 10.8% at the time of writing.

I would like to conclude by wishing my long-standing colleague and co-Investment Manager, Sarah Emly, who has been absent from the office for several months, a full recovery from her recent illness. I look forward to welcoming her back this year.

William Meadon

Sarah Emly

Investment Managers

10th March 2016

Principal Risks

The Directors confirm that they have carried out a robust assessment of the principal risks facing the Company, including those that would threaten its business model, future performance, solvency or liquidity.

With the assistance of the Manager, the Board has drawn up a risk matrix, which identifies the key risks to the Company. In assessing the risks and how they can be mitigated, the Board has given particular attention to those risks that might threaten the viability of the Company. These key risks fall broadly under the following categories:

•   Investment and Strategy: an inappropriate investment strategy, for example asset allocation or the level of gearing, may lead to underperformance against the Company's benchmark index and peer companies, resulting in the Company's shares trading on a wider discount. The Board manages these risks by diversification of investments through its investment restrictions and guidelines which are monitored and reported on by the Manager. JPMF provides the Directors with timely and accurate management information, including performance data and attribution analyses, revenue estimates, liquidity reports and shareholder analyses. The Board monitors the implementation and results of the investment process with the Investment Managers, who attend all Board meetings, and reviews data which show statistical measures of the Company's risk profile. The Investment Managers employ the Company's gearing within a strategic range set by the Board. The Board holds a separate meeting devoted to strategy each year.

•   Market: market risk arises from uncertainty about the future prices of the Company's investments. It represents the potential loss that the Company might suffer through holding investments in the face of negative market movements. The Company uses Index Futures to manage the effective level of gearing. Such instruments are also subject to fluctuations in value and may therefore result in gains or losses. The Board considers asset allocation, stock selection and levels of gearing on a regular basis and has set investment restrictions and guidelines, which are monitored and reported on by the Manager. The Board monitors the implementation and results of the investment process with the Manager.

•   Accounting, Legal and Regulatory: in order to qualify as an investment trust, the Company must comply with Section 1158 of the Corporation Tax Act 2010 ('Section 1158'). Were the Company to breach Section 1158, it might lose investment trust status and, as a consequence, gains within the Company's portfolio could be subject to Capital Gains Tax. The Section 1158 qualification criteria are continually monitored by the Manager and the results reported to the Board each month. The Company must also comply with the provisions of the Companies Act and, since its shares are listed on the London Stock Exchange, the UKLA Listing Rules and Disclosure & Transparency Rules ('DTRs'). A breach of the Companies Act could result in the Company and/or the Directors being fined or the subject of criminal proceedings. Breach of the UKLA Listing Rules or DTRs could result in the Company's shares being suspended from listing which in turn would breach Section 1158. The Board relies on the services of its Company Secretary and its professional advisers to ensure compliance with The Companies Act and the UKLA Listing Rules and DTRs.

•   Corporate Governance and Shareholder Relations: details of the Company's compliance with Corporate Governance best practice, including information on relations with shareholders, are set out in the Corporate Governance report within the Annual Report.

•   Operational: disruption to, or failure of, the Manager's accounting, dealing or payments systems or the depositary's or custodian's records could prevent accurate reporting and monitoring of the Company's financial position. This includes the risk of cybercrime and the consequent potential threat to security and business continuity. Details of how the Board monitors the services provided by the Manager and its associates and the key elements designed to provide effective internal control are included within the Risk Management and Internal Control section of the Corporate Governance report within the Annual Report.

•   Financial: the financial risks arising from the Company's financial instruments include market price risk, interest rate risk, liquidity risk and credit risk. Further details are disclosed in note 24 within the Annual Report.

Related Parties Transactions

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

Statement of Directors' Responsibilities

The Directors are responsible for preparing the annual report and accounts in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law, the Directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards) and applicable law. Under Company law the Directors must not approve the financial statements unless they are satisfied that, taken as a whole, the annual report and accounts are fair, balanced and understandable, provide the information necessary for shareholders to assess the Company's performance, business model and strategy and that they give a true and fair view of the state of affairs of the Company and of the total return or loss of the Company for that period. 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 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 a 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.

The Directors are responsible for keeping proper accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The accounts are published on the www.jpmclaverhouse.co.uk website, which is maintained by the Company's Manager. The maintenance and integrity of the website maintained by the Manager is, so far as it relates to the Company, the responsibility of the Manager. The work carried out by the auditors does not involve consideration of the maintenance and integrity of this website and, accordingly, the auditors accept no responsibility for any changes that have occurred to the accounts since they were initially presented on the website. The accounts are prepared in accordance with UK legislation, which may differ from legislation in other jurisdictions.

Under applicable law and regulations the Directors are also responsible for preparing a Directors' Report and Directors' Remuneration Report that comply with that law and those regulations.

Each of the Directors, whose names and functions are listed in the annual report, confirms that, to the best of their knowledge the financial statements, which have been prepared in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), give a true and fair view of the assets, liabilities, financial position and return or loss of the Company.

The Board confirms that it is satisfied that the annual report and accounts taken as a whole are fair, balanced and understandable and provide the information necessary for shareholders to assess the strategy and business model of the Company.

For and on behalf of the Board

Andrew Sutch

Chairman

10th March 2016

STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31ST DECEMBER 2015

		2015			2014
		Revenue	Capital	Total	Revenue	Capital	Total
		£'000	£'000	£'000	£'000	£'000	£'000
Gains/(losses) on investments held
at fair value through profit or loss		-	13,352	13,352	-	(2,479)	(2,479)
Net foreign currency losses		-	(10)	(10)	-	(12)	(12)
Income from investments		16,687	-	16,687	15,149	-	15,149
Interest receivable and similar income		3	-	3	34	-	34
Gross return/(loss)		16,690	13,342	30,032	15,183	(2,491)	12,692
Management fee		(616)	(1,145)	(1,761)	(608)	(1,128)	(1,736)
Performance fee		-	(3,660)	(3,660)	-	(325)	(325)
Other administrative expenses		(884)	-	(884)	(828)	-	(828)
Net return/(loss) on ordinary activities
before finance costs and taxation		15,190	8,537	23,727	13,747	(3,944)	9,803
Finance costs		(1,014)	(1,882)	(2,896)	(993)	(1,846)	(2,839)
Net return/(loss) on ordinary activities
before  taxation		14,176	6,655	20,831	12,754	(5,790)	6,964
Taxation		(8)	-	(8)	-	-	-
Net return/(loss) on ordinary activities
after taxation		14,168	6,655	20,823	12,754	(5,790)	6,964
Return/(loss) per share (note 2)		25.89p	12.16p	38.05p	23.31p	(10.58)p	12.73p
Dividends declared and payable in
respect of the year		21.50p			20.00p
Dividends paid during the year		21.50p			19.50p

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

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
	share	Share	redemption	Capital	Revenue
	capital	premium	reserve	reserves	reserve1	Total
	£'000	£'000	£'000	£'000	£'000	£'000
At 31st December 2013	14,192	149,641	6,680	166,747	13,106	350,366
Net (loss)/return on ordinary activities	-	-	-	(5,790)	12,754	6,964
Dividends appropriated in the year	-	-	-	-	(10,667)	(10,667)
At 31st December 2014	14,192	149,641	6,680	160,957	15,193	346,663
Net return on ordinary activities	-	-	-	6,655	14,168	20,823
Dividends appropriated in the year	-	-	-	-	(11,760)	(11,760)
At 31st December 2015	14,192	149,641	6,680	167,612	17,601	355,726

STATEMENT OF FINANCIAL POSITION AT 31ST DECEMBER 2015

		2015	2014
		£'000	£'000
Fixed assets
Investments held at fair value through profit or loss		402,792	402,912
Investment in liquidity fund held at fair value through profit or loss		30,702	25,141
		433,494	428,053
Current assets
Debtors		1,117	1,009
Cash and short term deposits		1,989	1,845
		3,106	2,854
Creditors:
Amounts falling due within one year		(2,509)	(2,230)
Derivative financial liabilities		-	(600)
Net current assets		597	24
Total assets less current liabilities		434,091	428,077
Creditors:
Amounts falling due after more than one year		(74,865)	(79,838)
Provision for liabilities and charges		(3,500)	(1,576)
Net assets		355,726	346,663
Capital and reserves
Called up share capital		14,192	14,192
Share premium		149,641	149,641
Capital redemption reserve		6,680	6,680
Capital reserves		167,612	160,957
Revenue reserve		17,601	15,193
Shareholders' funds		355,726	346,663
Net asset value per share (note 4)		650.0p	633.5p

Company registration number: 754577.

STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31ST DECEMBER 2015

		2015	2014
		£'000	£'000
Net cash outflow from operations before dividends and interest		(4,137)	(3,893)
Dividends received		16,488	15,266
Interest received		98	60
Interest paid		(2,856)	(2,768)
Overseas tax recovered		1	-
Net cash inflow from operating activities		9,594	8,665
Purchases of investments		(104,473)	(153,547)
Sales of investments		117,697	159,825
Settlement of futures contracts		(353)	(80)
Settlement of foreign currency contracts		-	13
Net cash inflow from investing activities		12,871	6,211
Dividends paid		(11,760)	(10,667)
Repayment of bank loans		(5,000)	(40,000)
Drawdown of bank loans		-	58,000
Net cash (outflow)/inflow from financing activities		(16,760)	7,333
Increase in cash and cash equivalents		5,705	22,209
Cash and cash equivalents at start of year		26,986	4,777
Cash and cash equivalents at end of year		32,691	26,986
Increase in cash and cash equivalents		5,705	22,209
Cash and cash equivalents consist of:
Cash at bank		1,989	1,845
Investments in liquidity funds		30,702	25,141
Total		32,691	26,986

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30TH DECEMBER 2015

1.    Accounting policies

(a)  Basis of accounting

The financial statements are prepared in accordance with the Companies Act 2006, United Kingdom Generally Accepted Accounting Practice ('UK GAAP'), including FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' (the 'SORP') issued by the AIC in November 2014. All of the Company's operations are of a continuing nature.

The financial statements have been prepared on a going concern basis.

2.   Return/(loss) per ordinary share

The revenue return per ordinary share is based on the earnings attributable to the ordinary shares of £14,168,000 (2014: £12,754,000) and on the weighted average number of shares in issue during the year of 54,723,979 (2014: 54,723,979) excluding shares held in Treasury.

The capital return per ordinary share is based on the earnings attributable to the ordinary shares of £6,655,000 (2014: £5,790,000 loss) and on the weighted average number of shares in issue during the year of 54,723,979 (2014: 54,723,979) excluding shares held in Treasury.

The total return per ordinary share is based on the earnings attributable to the ordinary shares of £20,823,000 (2014: £6,964,000) and on the weighted average number of shares in issue during the year of 54,723,979 (2014: 54,723,979) excluding shares held in Treasury.

3.   Dividends¹

(a)  Dividends paid and proposed

	2015	2014
	£'000	£'000
Unclaimed dividends refunded to the Company2	(5)	(5)
2014 fourth quarterly dividend of 6.50p (2013: 6.00p) paid in March 2015	3,557	3,283
First quarterly dividend of 5.00p (2014: 4.50p) paid in June 2015	2,736	2,463
Second quarterly dividend of 5.00p (2014: 4.50p) paid in September 2015	2,736	2,463
Third quarterly dividend of 5.00p (2014: 4.50p) paid in December 2015	2,736	2,463
Total dividend paid in the year of 21.50p (2014: 19.50p)	11,760	10,667

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

²     Represents dividends which remain unclaimed after a period of 12 years and thereby become the property of the Company.

	2015	2014
	£'000	£'000
Fourth quarterly dividend of 6.50p (2014: 6.50p) paid on 1st March 2016	3,557	3,557

The fourth quarterly dividend has been declared and paid in respect of the year ended 31st December 2015. This dividend will be reflected in the accounts for the year ending 31st December 2016.

(b) Dividend for the purposes of Section 1158 of the Corporation Tax Act 2010 ('Section 1158')

The requirements of Section 1158 are considered on the basis of dividends declared in respect of the financial year, as shown below. The revenue available for distribution by way of dividend for the year is £14,168,000 (2014: £12,754,000). The minimum distribution required under Section 1158 is £11,664,000 (2014: £10,477,000). Brought forward revenue reserves amounting to £nil (2014: £nil) have been utilised in order to finance the dividend.

	2015	2014
	£'000	£'000
First quarterly dividend of 5.00p (2014: 4.50p) paid in June 2015	2,736	2,463
Second quarterly dividend of 5.00p (2014: 4.50p) paid in September 2015	2,736	2,463
Third quarterly dividend of 5.00p (2014: 4.50p) paid in December 2015	2,736	2,463
Fourth quarterly dividend of 6.50p (2014: 6.50p) paid on 1st March 2016	3,557	3,557
Total dividend declared in respect of the year of 21.50p (2014: 20.00p)	11,765	10,946

4.   Net asset value per share

Net asset value per share is based on the net assets attributable to the ordinary shareholders of £355,726,000 (2014: £346,663,000) and on the 54,723,979 (2014: 54,723,979) shares in issue at the year end, excluding shares held in Treasury.

5.   Status of announcement

2014 Financial Information

The figures and financial information for 2014 are extracted from the published Annual Report and Accounts for the year ended 31st December 2014 and do not constitute the statutory accounts for that year. The Annual Report and Accounts has been delivered to the Registrar of Companies and included the Report of the Independent Auditors which was unqualified and did not contain a statement under either section 498(2) or section 498(3) of the Companies Act 2006.

2015 Financial Information

            The figures and financial information for 2015 are extracted from the Annual Report and Accounts for the year ended 31st December 2015 and do not constitute the statutory accounts for the year. The Annual Report and Accounts includes the Report of the Independent Auditors which is unqualified and does not contain a statement under either section 498(2) or section 498(3) of the Companies Act 2006. The Annual Report and Accounts will be delivered to the Registrar of Companies in due course.

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

10th March 2016

For further information:

Jonathan Latter,

JPMorgan Asset Management (UK) Limited              020 7742 4000

ENDS

A copy of the annual report will shortly be submitted to the National Storage Mechanism and will be available for inspection at www.morningstar.co.uk/uk/NSM

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

JPMORGAN FUNDS LIMITED

 

END

 

 

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