Interim Results
JPMorgan Russian Securities PLC
30 June 2006
LONDON STOCK EXCHANGE ANNOUNCEMENT
JPMORGAN RUSSIAN SECURITIES PLC
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30TH APRIL 2006
Performance
Over the six months to the 30th April 2006, the net asset value and share price
of the Company rose substantially as the Russian equity markets benefited from
higher commodity prices and a re-rating of Russia's economic potential.
The net asset value appreciation of +64.0% was behind that of the benchmark
index, the CSFB ROS Index which grew by +79.1%. The benchmark index is heavily
dominated by a small number of energy stocks which makes its relevance as a true
indicator of investment manager performance unreliable.
The Company's share price rose by +77.5% as the discount at which the shares
trade to their net asset value reduced from 8.0% to 0.1%.
Revenue and Earnings
The revenue loss after taxation for the six months ended 30th April 2006 was
£1,291,000, which equates to a loss per share of 2.30p.
Investment Management Team
JPMorgan Asset Management have been reviewing their resources in their emerging
markets team and as a result of this we are pleased to report that Vitaly
Kazakov will be working as the joint investment manager of the Company. Vitaly
has been working with Oleg in the Moscow office for the last two years. He
replaces Ashraf Ansary who is working in other emerging market areas for
JPMorgan. We are grateful to Ashraf for his assistance.
Update
As shareholders will be aware, there has been a sharp fall in many world equity
markets over the last few weeks and Russia has not escaped. Some investors have
become concerned over the outlook for inflation and rising commodity prices and
have sold assets perceived as being more risky, such as the Russian market. The
net asset value per share of the Company as at 29th June 2006 was 417.9p, which
is a fall of 12.6% since the end of April. The Company has had no gearing
through this period and the Board and investment managers believe that the
underlying economic position of the companies we have invested in remains
strong.
Pamela Idelson Smith
Chairman
30th June 2006
For further information please contact:
Hilary Lowe, JPMorgan Asset Management (UK) Limited .............. 020 7742 3408
JPMorgan Russian Securities plc
Unaudited figures for the six months ended 30th April 2006
Income Statement
Six months to 30 April 2006 Six months to 30 April 2005 Year to 31 October 2005
Revenue Capital Total Revenue Capital Total Revenue Capital Total
Return Return Return Return Return Return Return Return Return
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Realised gains/(losses) on
investments - 7,816 7,816 - (1,874) (1,874) - 4,415 4,415
Unrealised gains/(losses) on
investments - 99,197 99,197 - (968) (968) - 45,268 45,268
Currency (losses)/gains on
cash and short-term deposits
held during the period - (226) (226) - (230) (230) - 415 415
Unrealised foreign
exchange gains/(losses) on
US Dollar loan - 461 461 - 350 350 - (887) (887)
Realised foreign exchange
loss on US Dollar loan - (481) (481) - - - - - -
Other capital charges - (15) (15) - (33) (33) - (51) (51)
Overseas dividends 963 - 963 1,028 - 1,028 2,692 - 2,692
Deposit interest 139 - 139 63 - 63 149 - 149
_______ ________ _______ _______ ________ _______ _______ _______ _______
Gross return /(loss) 1,102 106,752 107,854 1,091 (2,755) (1,664) 2,841 49,160 52,001
Management fee (1,656) - (1,656) (919) - (919) (1,989) - (1,989)
Other administrative
expenses (215) - (215) (146) - (146) (373) - (373)
_______ ________ _______ _______ ________ _______ _______ _______ _______
Net return before finance
costs and taxation (769) 106,752 105,983 26 (2,755) (2,729) 479 49,160 49,639
Finance costs (388) - (388) (378) - (378) (822) - (822)
_______ _______ _______ _______ _______ _______ _______ _______ _______
Loss/return before (1,157) 106,752 105,595 (352) (2,755) (3,107) (343) 49,160 48,817
taxation
Taxation (134) - (134) (174) - (174) (527) - (527)
______ _______ _______ ______ _______ _______ _______ _______ _______
(Loss)/return (1,291) 106,752 105,461 (526) (2,755) (3,281) (870) 49,160 48,290
attributable to
shareholders
(Loss)/return per (2.30)p 191.08p 188.78p (0.94)p (4.90)p (5.84)p (1.55)p 87.53p 85.98p
ordinary share
All revenue and capital items in the above statement derive from continuing
operations. No operations were acquired or discontinued in the period.
The total return column of this statement is the profit and loss account of the
Company and the revenue and capital return columns represent supplementary
information.
JPMorgan Russian Securities plc
Unaudited figures for the six months ended 30th April 2006
Reconciliation of Movements in Shareholders' Funds
Called up Capital
share redemption Capital Other Revenue
capital reserve reserve reserve reserve Total
£'000 £'000 £'000 £'000 £'000 £'000
At 31st October 2004 562 39 62,049 53,361 (36) 115,975
Net capital return from ordinary
activities - - 49,160 - - 49,160
Net revenue loss from ordinary
activities - - - - (870) (870)
_______ ________ ________ _______ _______ ________
At 31st October 2005 562 39 111,209 53,361 (906) 164,265
Adjustment to opening shareholders'
funds at 1st November 2005 to reflect
the adoption of bid prices - - (1,276) - - (1,276)
Net capital return from ordinary
activities - - 106,752 - - 106,752
Net revenue loss from ordinary
activities - - - - (1,291) (1,291)
_______ ________ ________ _______ ________ ________
At 30th April 2006 562 39 216,685 53,361 (2,197) 268,450
JPMorgan Russian Securities plc
Unaudited figures for the six months ended 30th April 2006
BALANCE SHEET 30th April 30th April 31st October
2006 2005 2005
£'000 £'000 £'000
Investments at fair value through profit or loss 272,782 115,944 170,163
Net current liabilities (4,332) (3,250) (5,898)
_______ _______ _______
Total assets less current liabilities 268,450 112,694 164,265
===== ===== =====
Net asset value per ordinary share 478.0p 200.7p 292.5p
CASH FLOW STATEMENT
2006 2005 2005
£'000 £'000 £'000
Net cash (outflow)/inflow from operating activities (1,075) 160 698
Net cash outflow from servicing of finance (402) (350) (822)
Net cash inflow from capital expenditure and
financial investment 4,993 3,243 6,764
Net cash (outflow)/inflow from financing (8,713) 5,143 5,145
_______ _______ ______
(Decrease)/increase in cash for the period (5,197) 8,196 11,785
===== ===== ====
Accounting policies
The Company has adopted certain new accounting policies due to the issue of new
financial reporting standards (FRSs) and the issue of the revised Statement of
Recommended Practice 'Financial statements of investment trust companies' (the
SORP) by the AITC in December 2005.
The new FRSs and the the SORP have given rise to some changes in presentation.
The Statement of Total Return is now called the Income Statement and the total
return column, as opposed to the revenue column, is now the profit and loss
account of the Company. There is also a new primary statement, the
Reconciliation of Movements in Shareholder's Funds.
Investments are designated as held at 'fair value through profit or loss' in
accordance with FRS 26: 'Financial Instruments: Measurement'. Listed investments
are valued at bid market prices. This represents a change in accounting policy,
but in accordance with paragraph 108D of FRS 26, comparatives have not been
restated. In prior periods investments were valued at last traded prices. The
adoption of bid prices on 1st November 2005 reduced the published value of
investments by £1,276,000, which represented 0.8% of equity shareholders funds.
The results for the year ended 31st October 2005 are a non-statutory version of
the full report and accounts for that year which have been filed with the
Registrar of Companies and on which the auditors reported under S235 of the
Companies Act 1985. The report contained no qualifications or any statement
under S237( 2) or (3) of the said Act.
JPMORGAN ASSET MANAGEMENT (UK) LIMITED
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