Half-year Report

RNS Number : 0689D

JPMorgan Russian Securities PLC

24 June 2019

 

LONDON STOCK EXCHANGE ANNOUNCEMENT

JPMORGAN RUSSIAN SECURITIES PLC

UNAUDITED HALF YEAR RESULTS FOR THE SIX MONTHS ENDED
30TH APRIL 2019

Legal Entity Identifier:  549300II3MHI98ZLVH37

Information disclosed in accordance with DTR 4.2.2

CHAIRMAN'S STATEMENT

Performance

I am pleased to report that in the first half of the Company's financial year to 30th April 2019 political relations between Russia and the West have proved to be relatively uneventful, certainly when compared with the previous period. The overall economic performance in Russia has remained positive with Russia being the best performing major emerging market in the period. This has benefitted the Company's portfolio which consists of companies with strong balance sheets, able to support substantial dividend pay-outs. During the six months ended 30th April 2019 the Company's net asset value on a total return basis increased by 9.5%. The Company's return to shareholders on a total return basis was positive 16.1%, taking into account the stock price movement and dividend paid over the period. Both these measures were ahead of the Company's benchmark (RTS index) which returned 9.4% on a total return basis.

The Company's discount to net asset value has remained disappointingly wide, although it ended the period narrower at 14.3% (at the end of the Company's last financial year the discount was 19.0%) contributing to the very positive move in shareholder total return. The average discount over the period was 16.5%. However as I have commented before this is not surprising given the continuing sanctions against Russia and the negative sentiment that persist between Russia and many other major nations. At the time of writing there have been no significant political developments, although as we are all very aware events always have the potential to arise unexpectedly. JPMorgan Asset Management's compliance function monitors the Company's investments and provides assurances of compliance with the current sanctions regime. In addition JPMorgan and the Board closely monitor both economic and political risks to the Company. The Investment Managers Report includes further comment on the economic and political impacts on the Russian market.

The Board have also reviewed the work undertaken by JPMorgan on environmental, social and governance matters (ESG) in relation to the portfolio your Company is invested in. An increasingly broad spectrum of investors now rightly focus on ESG issues when considering their investments. The Company is aware of this trend. For many years the Company's Investment Managers have taken them into account in their investment process, particularly governance factors to ensure that shareholder and managers interests are as closely aligned as possible. The Investment Managers regularly engage on ESG issues in meetings with company management. We believe that companies that address ESG issues and adopt sustainable business practices are better placed to generate sustainably strong performance and create enduring value for shareholders. The Manager also exercises the Company's proxy votes in a prudent and diligent manner in the interests of our shareholders. Further details of the Company's approach to Proxy Voting and Stewardship / Engagement can be found in the Company's Corporate Governance and Voting Policy, which is included in the Company's Annual Report and Financial Statements.

Discount Control

The Board's objective remains to use the share repurchase authority to assist in managing any imbalance between supply and demand for the Company's shares, thereby reducing the volatility of the discount. During the period the discount ranged from 19.0% to 14.3%. As referred to in previous years statements, the Board has committed to buying back, subject to market conditions, at least 6.0% of its issued share capital per annum. During the course of the six month period 1,364,650 shares were bought back, approximately 2.9% of the Company's issued share capital at 30th April 2019. This added 0.5% to the Company's NAV return in the period. The average discount at which these shares were bought back was 16.6% and these buybacks represented approximately 17.7% of traded market volume during the period in which they were undertaken. The policy was initiated in January 2018. Although the discount has generally narrowed over the period, the discount remains wider than the Board would like to see, but we have to recognise that sentiment towards investment in Russia remains cautious, so limiting the demand for the company's shares.

Revenue, Earnings and Dividend

Revenue for the six month period to 30th April 2019 after taxation was £1,554,000 (30th April 2018: £2,188,000) and the return per share, calculated on the basis of the average number of shares in issue was 3.21 pence (30th April 2018: 4.22 pence) per share. The Company's dividend income for the half year to 30th April 2019 is lower than the half year to 30th April 2018, mainly because the Company's portfolio now contains more companies that pay annual dividends later in the Company's financial year. In comparison, in the previous year the portfolio included more companies paying semi-annual and quarterly dividends earlier in the Company's financial year. This can be regarded as a timing difference and not an indication of reduced dividend flows for the financial year. Whilst the level of income expected from a company is not the key driver of the investments managers' choice of investments, it is an important indication of the companies' financial strength and prospects, and their commitment to delivering shareholder value.

The Company's current income forecast for the full year indicates continuing growth in dividend income. Following the pattern of the previous year, the Company's interim dividend is expected to be considered by the Board for declaration in September 2019 and is likely to represent the large majority of the total annual dividend, with a significantly smaller final dividend being recommended for approval by the shareholders at the Annual General Meeting for payment in March 2020.

Board of Directors

As detailed in the announcement of 8th March 2019, the appointment of Philippe Delpal as a non-executive director of the Company was postponed due to personal circumstances. George Nianias kindly agreed to be reappointed at the Company's Annual General Meeting on 12th March 2019. However, as Philippe Delpal continued to be unavailable for appointment, the Board decided to withdraw its offer made to him and recommence the search for a non-executive director to replace George Nianias, in line with its Succession Plan.

Investment Manager

Oleg Biryulyov and Habib Saikaly continue to be the Company's Investment Managers supported by JPMorgan Asset Management's Emerging Markets and Asia Pacific equities team (EMAP), which consists of growing number of investment professionals, now in excess of 100. The Board meets the investment managers regularly so as to understand and question their investment strategy and the portfolio choices. It also reviews the performance of all the other services provided by the Investment Manager each year.

Outlook

The Company's objective remains to maximise total return to shareholders from a diversified portfolio of investments primarily in quoted Russian securities. As mentioned above dividends increasingly play an important part in this and we are generally optimistic that this trend will continue. The outlook for the Russian economy is by no means universally positive with domestic demand looking rather weak and hence the investment manager has reduced some of the company's holdings exposed to the domestic market. However, it is expected that major exporters will continue to do well, particularly the energy companies which form just over 50% of our portfolio, as they should benefit from the firm oil price The Board believes that the investment approach adopted by the Investment Managers' is the correct one for the Russian market, focussing as it does on well capitalised companies with strong business models, good management and a positive attitude to shareholders interests. Investing in Russia is likely to remain something of a roller coaster for the foreseeable future. However, for those with the stomach for the ride, given the fundamentals of the market and the fact that it remains relatively undervalued compared with other key emerging markets, there is a strong case for investment.

Gill Nott

Chairman                                                                                                                                     21st June 2019

INVESTMENT MANAGERS' REPORT

Market review - and tentative signs of recovery

As we look back at the six-month period to 30th April 2019, it is apparent that global equity markets have surprised on the upside so far this year, recovering ground after a tricky end to 2018. Markets are seemingly less preoccupied by stagnant economic growth around the world and ongoing political uncertainty than they were in 2018 - even though both issues remain unresolved. Equity markets have risen this year, and global investors have become more upbeat, perhaps partly responding to central banks around the world pressing the 'pause' button on interest rate rises.

For Russia, the thorny topic of sanctions has not gone away and remains fluid but, a year on from the surprise US announcement of additional sanctions that hit the market with such force last April, the worst of the storm may already have been weathered. Moreover, the spotlight of attention has shifted to the ongoing trade wrangles between the USA and China so that Russian investment markets have been able to progress relatively unhindered. After all the negative sanctions noise directed at Russia in recent years, this vast country's economy appears to be showing tentative signs of recovery, with more recent stability in oil and currency prices both positive indicators. Dividend pay-outs from Russian companies have also maintained their positive trajectory.

Global politics remain an issue. Of all the simmering international challenges that could threaten to boil over into something more troublesome, the Russia-Ukraine stalemate is one that we continue to monitor closely. This story has taken a new turn following the landslide election of former comedian and novice politician Volodymyr Zelensky, who was inaugurated as President in May 2019. We are sceptical that this change in leadership will ease tensions between the two countries. Indeed, tensions grew towards the end of the review period as the Russian government made it easier for Ukrainian citizens to obtain a Russian passport.

Oil prices, so pivotal to the fortunes of the Russian economy, have seesawed over recent months. With the direction of travel for the global economy uncertain, oil price volatility is inevitable. That said, oil prices recovered over the period, providing support for the economy and we expect firmer prices throughout 2019. To temper our optimism, however, recent statistics have revealed sluggish economic growth of just 0.5% in the first quarter of 2019, which was much weaker than expected. An unpopular hike in VAT, which took effect from January, is likely to have been a key drag on growth, dampening consumer demand, albeit most likely a temporary stumbling block.

Against a rather more benign yet still uncertain backdrop, Russian markets have outperformed other emerging markets over the review period. Over the six months to 30th April 2019, the Company's net asset value was up 9.5% on a total return basis, just ahead of the benchmark, the RTS Index, which rose by 9.4% on a net asset value total return basis. The total return to shareholders was a pleasing 16.1% in sterling terms, partly reflecting a narrowing of the discount over the period, as explained in the Chairman's Statement.

Our approach and commitment to uncovering value

As a reminder, ours is the only investment trust providing pure exposure to the ongoing transformation of the Russian economy and we strive to uncover the value in Russian equities. We aim to build a balanced portfolio of stocks from across the Russian market, with a focus on companies that demonstrate the best long-term growth opportunities. To do this, we actively manage the portfolio and continue to build up internal research capabilities and a growing team of analysts with deep expertise in this complex and under-researched market.

We base our decisions on a proven investment process that analyses the specific characteristics of stocks. We believe that an active approach makes sense when investing in Russia, given the market concentration and corporate governance issues.

How have specific stocks and sectors fared?

Over 50% of the Company's portfolio is invested in the Energy sector, where an improved outlook for energy prices - albeit prone to short-term volatility - has contributed to relative returns over the period.

The most notable positive contributor - and the largest holding in our portfolio - was our exposure to LUKOIL, one of the world's largest oil and gas companies, which reported better-than-expected results for its 4th quarter of 2018. Its profits for the year were up almost 50% year-on-year.

When rising energy consumption demands are coupled with production capacity constraints (for whatever reason) this propels energy prices upwards. However, prices were very erratic and we witnessed this in the latter part of 2018, when crude oil prices fell. This impacted on another of our largest Energy holdings, the world's largest publicly traded petroleum company Rosneft which detracted from returns. Of our other holdings within the Energy sector, we trimmed our position in Inter RAO, on the back of a declining earnings outlook and management indications for an increase in capital expenditure.

Stock selection within the Materials sector was strong. Our holding in Polyus, the largest gold producer in Russia and one of the top 10 gold producers globally, was notable. The stock significantly outperformed the broader market on the back of rising gold prices. Additionally, our exposure to Polymetal International, a precious metals mining company, also boosted relative returns. During the period, the company reported strong second half results for 2018, in line with market expectations. Additionally, investors were encouraged as dividend yields came in higher than expected whilst total cash costs came in at the lower end of what had previously been provided by management, which also boosted investor sentiment.

First-hand knowledge of the complex Russian market drives our investment decisions. Our investment in PhosAgro demonstrates this. We trimmed our exposure to this chemicals company and producer of fertilizer, phosphates and feed phosphates, as a result of a meeting with management. We were disappointed by the company's outlook for free cash flow and dividends.

In our investment report to 31st October 2018, we commented on our off-benchmark holding in Ros Agro, one of Russia's largest agricultural companies, and a major producer of pork, fats and sugars. The company was experiencing tough times and had made a negative contribution to performance. However, we kept faith with RosAgro's investment strategy, and it has been one of the leading contributors to returns during the current review period. At its recent 'Analyst Day', investors were encouraged by the outlook for future earnings. The company is expected to benefit from higher grain, sugar and pork prices, while margins in the oil and fats business are expected to be close to record levels.

Within Financials, our exposure to TBC Bank, headquartered in Tbilisi, Georgia, weighed on relative returns. The stock was hurt during the period due to slowing loan growth in the Georgian market. Although we consider TBC very well run, we trimmed our position as we expect the current business environment will likely lead to earnings downgrades.

On a more positive note, we initiated a position in Qiwi, a leading provider of online payments and financial services. The company has been described as Russia's equivalent to PayPal and has approximately 50 million customers and processes approximately US$40 million of payments a day.

Finally, within the Real Estate space, we took profits in Etalon, Russia's oldest and largest residential real estate developer, on the back of record sales performance and associated share price movements.

Outlook

It is easy to forget that Russia's economy only returned to economic growth in 2017 after suffering two years of recession. 2018 may have been a surprisingly positive year overall for Russian equities, but there was a wide dispersion in returns achieved across the market which plays to our strengths as stock pickers. Our investment approach, and our focus on identifying long-term growth opportunities from individual stocks, has delivered robust returns to shareholders over recent reporting periods, even though the underlying economic and geopolitical landscape has been challenging and changeable.

Our current thinking has not shifted materially since our January 2019 report. On a short-term view, the economic picture is undeniably mixed, with sluggish global growth likely to weigh heavily on the outlook for Russia. Domestically, the economy has not been improving as we would have hoped and, as things stand, we do not expect domestic consumption to be the main driver of returns in the next 12 months. We will therefore remain cautiously underweight domestic stories and will concentrate our attention on export-focused businesses.

Looking further out, we are confident that economic recovery in Russia remains on track and we passionately believe that Russian equities provide a long-term investment opportunity. We expect to see:

•        Firmer oil prices, driven by production cuts and politics, which will be positive for the earnings of Russian companies.

•        Interest rates to fall by 1 to 1.5% over the next 18 months, an expectation made more likely by the most recent set of statistics that showed lacklustre economic growth.

•        Rising dividend payments and dividend yields expected to remain strong, highlighting the attractive valuations available. With local Russian investors becoming bigger participants in the equity market, we expect the search for yield to become more prevalent.

•        The rouble continuing to be volatile, but with the possibility of less intervention from the Central Bank who had been aiming to keep the currency relatively weak but is now under less pressure to build reserves.

•        The environment around sanctions remaining fluid, and we will continue to monitor the situation. However, there is every possibility that relationships with the West will thaw rather than worsen.

•        Likelihood of capital flows to the Russian economy - and to investment markets - as a result of government reforms and its privatisation programme, i.e. selling off state-owned enterprises that would trigger higher dividends.

Naturally, investing in Russia is not without its challenges but investing in any single country brings with it a series of specific risks. For those investors prepared to accept these risks, we believe the fundamentals for investing in Russia remain compelling and our ability and resources to uncover well-managed companies with robust balance sheets is both proven and remains strong.

We are very selective about the companies we invest in. We still believe the market is attractively valued, with particular value to be found in certain sectors. We will continue to base our investment decisions on relatively strong and improving fundamentals, which we believe will reassert themselves as the primary drivers of returns over time. For now, however, we will stick to our investment process and look beyond short-term volatility, spurred on by the reasonable company valuations we are seeing and in anticipation of sentiment towards Russia becoming more positive.

Oleg I. Biryulyov

Habib Saikaly

Investment Managers                                                                                                                           21st June 2019

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: investing in Russia; share price discount and Net Asset Value per share; investment underperformance and strategy; failure of investment process; loss of investment team and Manager; operational and cyber crime; board relationship and shareholders; political and economic regulatory and legal market and financial. Information on each of these areas is given in the Business Review within the Annual Report and Accounts for the year ended 31st October 2018.

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 during the period.

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 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/loss of the Company, as at 30th April 2019 as required by the UK Listing Authority Disclosure and Transparency Rule 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

Gill Nott

Chairman                                                                                                                                          21st June 2019

STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED 30TH APRIL 2019

	(Unaudited)			(Unaudited)			(Audited)
	Six months ended			Six months ended			Year ended
	30th April 2019			30th April 2018			31st October 2018
	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	-	26,124	26,124	-	5,069	5,069	-	19,505	19,505
Net foreign currency
gains/(losses)	-	37	37	-	(55)	(55)	-	111	111
Income from investments	2,750	-	2,750	3,102	-	3,102	19,170	-	19,170
Interest receivable and similar
income	36	-	36	17	-	17	37	-	37
Gross return	2,786	26,161	28,947	3,119	5,014	8,133	19,207	19,616	38,823
Management fee	(604)	(905)	(1,509)	(313)	(1,253)	(1,566)	(620)	(2,482)	(3,102)
Other administrative expenses	(347)	-	(347)	(395)	-	(395)	(1,012)	-	(1,012)
Net return on ordinary
activities before finance
costs and taxation	1,835	25,256	27,091	2,411	3,761	6,172	17,575	17,134	34,709
Finance costs	-	-	-	-	(1)	(1)	-	-	-
Net return on ordinary
activities before taxation	1,835	25,256	27,091	2,411	3,760	6,171	17,575	17,134	34,709
Taxation	(281)	-	(281)	(223)	-	(223)	(2,498)	-	(2,498)
Net return on ordinary
activities after taxation	1,554	25,256	26,810	2,188	3,760	5,948	15,077	17,134	32,211
Return per share (note 3)	3.21p	52.15p	55.36p	4.22p	7.24p	11.46p	29.58p	33.62p	63.20p

STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTHS ENDED 30TH APRIL 2019

	Called up	Capital
	share	redemption	Other	Capital	Revenue
	capital	reserve	reserve	reserves1	reserve1	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Six months ended 30th April 2019 (Unaudited)
At 31st October 2018	491	110	30,438	262,988	9,162	303,189
Repurchase and cancellation of the Company's
own shares	(14)	14	(7,247)	-	-	(7,247)
Net return on ordinary activities	-	-	-	25,256	1,554	26,810
Dividend paid in the period (note 4)	-	-	-	-	(2,905)	(2,905)
At 30th April 2019	477	124	23,191	288,244	7,811	319,847
Six months ended 30th April 2018 (Unaudited)
At 31st October 2017	523	78	46,838	245,854	7,068	300,361
Repurchase and cancellation of the Company's
own shares	(12)	12	(6,420)	-	-	(6,420)
Net return on ordinary activities	-	-	-	3,760	2,188	5,948
Dividend paid in the period (note 4)	-	-	-	-	(3,119)	(3,119)
At 30th April 2018	511	90	40,418	249,614	6,137	296,770
Year ended 31st October 2018 (Audited)
At 31st October 2017	523	78	46,838	245,854	7,068	300,361
Repurchase and cancellation of the Company's
own shares	(32)	32	(16,400)	-	-	(16,400)
Net return on ordinary activities	-	-	-	17,134	15,077	32,211
Dividends paid in the year (note 4)	-	-	-	-	(12,983)	(12,983)
At 31st October 2018	491	110	30,438	262,988	9,162	303,189

^{1 These reserves form the distributable reserves of the Company and may be used to fund distributions to investors via dividend payments.}

STATEMENT OF FINANCIAL POSITION

AT 30TH APRIL 2019

	(Unaudited)	(Unaudited)	(Audited)
	30th April 2019	30th April 2018	31st October 2018
	£'000	£'000	£'000
Fixed assets
Investments held at fair value through profit or loss	319,332	294,504	299,101
Current assets
Derivative financial assets	-	1	-
Debtors	192	1,659	1,221
Cash and cash equivalents	402	1,789	2,997
	594	3,449	4,218
Current liabilities
Creditors: amounts falling due within one year	(79)	(1,183)	(130)
Net current assets	515	2,266	4,088
Total assets less current liabilities	319,847	296,770	303,189
Net assets	319,847	296,770	303,189
Capital and reserves
Called up share capital	477	511	491
Capital redemption reserve	124	90	110
Other reserve	23,191	40,418	30,438
Capital reserves	288,244	249,614	262,988
Revenue reserve	7,811	6,137	9,162
Total shareholders' funds	319,847	296,770	303,189
Net asset value per share (note 5)	670.1p	581.5p	617.6p

STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS ENDED 30TH APRIL 2019

	(Unaudited)	(Unaudited)	(Audited)
	Six months ended	Six months ended	Year ended
	30th April 2019	30th April 2018	31st October 2018
	£'000	£'000	£'000
Net cash outflow from operations before dividends and
interest	(1,908)	(2,007)	(3,937)
Dividends received	3,450	3,426	16,228
Interest received	36	17	37
Overseas tax recovered/(paid)	13	-	(6)
Interest paid	-	(1)	-
Net cash inflow from operating activities	1,591	1,435	12,322
Purchases of investments	(16,182)	(40,515)	(86,415)
Sales of investments	22,110	48,845	105,236
Settlement of forward currency contracts	39	(9)	(60)
Net cash inflow from investing activities	5,967	8,321	18,761
Repurchase and cancellation of the Company's own shares	(7,247)	(6,142)	(16,402)
Dividends paid	(2,905)	(3,108)	(12,972)
Net cash outflow from financing activities	(10,152)	(9,250)	(29,374)
(Decrease)/increase in cash and cash equivalents	(2,594)	506	1,709
Cash and cash equivalents at start of period/year	2,997	1,281	1,281
Exchange movements	(1)	2	7
Cash and cash equivalents at end of period/year	402	1,789	2,997
(Decrease)/increase in cash and cash equivalents	(2,594)	506	1,709
Cash and cash equivalents consist of:
Cash and short term deposits	356	519	2,665
Cash held in JPMorgan US Dollar Liquidity Fund	46	1,270	332
Total	402	1,789	2,997

NOTES TO THE FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 30TH APRIL 2019

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 October 2018 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 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 February 2018.

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 April 2019.

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 October 2018.

Changes in allocation of expense

With effect from 1st November 2018, management fees incurred by the Company have been allocated 60% to capital and 40% to revenue. In previous periods, these charges were allocated 80% to capital and 20% to revenue. In line with the guidance provided in the SORP, this change is not considered to be a change of accounting policy and consequently no prior period restatements have been made.

3.       Return per share

	(Unaudited)	(Unaudited)	(Audited)
	Six months ended	Six months ended	Year ended
	30th April 2019	30th April 2018	31st October 2018
	£'000	£'000	£'000
Return per share is based on the following:
Revenue return	1,554	2,188	15,077
Capital return	25,256	3,760	17,134
Total return	26,810	5,948	32,211
Weighted average number of shares in issue	48,427,728	51,899,865	50,961,280
Revenue return per share	3.21p	4.22p	29.58p
Capital return per share	52.15p	7.24p	33.62p
Total return per share	55.36p	11.46p	63.20p

4.       Dividends paid

	(Unaudited)	(Unaudited)	(Audited)
	Six months ended	Six months ended	Year ended
	30th April 2019	30th April 2018	31st October 2018
	£'000	£'000	£'000
2018 final dividend of 6.0p (2017: 6.0p)	2,905	3,119	3,119
2018 interim dividend of 20.0p (2017: 15.0p)	-	-	9,864
Total dividends in the period/year	2,905	3,119	12,983

All dividends paid in the period/year have been funded from the revenue reserve.

The 2019 interim dividend is expected to be payable in October 2019.

5.       Net asset value per share

	(Unaudited)	(Unaudited)	(Audited)
	Six months ended	Six months ended	Year ended
	30th April 2019	30th April 2018	31st October 2018
Net assets (£'000)	319,847	296,770	303,189
Number of shares in issue	47,728,734	51,035,669	49,093,384
Net asset value per share	670.1p	581.5p	617.6p

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

21^st June 2019

ENDS

A copy of the half year will be submitted to the National Storage Mechanism and will shortly be available for inspection at www.hemscott.com/nsm.do

The half year will also shortly be available on the Company's website at www.jpmrussian.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

 

 

IR EAAKFAANNEFF