Annual Financial Report

RNS Number : 1887Z

JPMorgan European Smaller Co.

25 May 2016

 

LONDON STOCK EXCHANGE ANNOUNCEMENT

JPMORGAN EUROPEAN SMALLER COMPANIES TRUST PLC

FINAL RESULTS FOR THE YEAR ENDED
31^ST MARCH 2016

Chairman's Statement

Performance

I am delighted to report that the Company produced a net asset value total return of +16.6% for the year ended 31st March 2016, compared with the benchmark total return of +7.2% over the same period. The share price total return for the year was +19.7%, as the discount narrowed over the year. I would like to congratulate our Investment Managers for this excellent performance, which continues the Company's very strong long term performance. It remains well ahead of the benchmark index over three, five and ten years.

The main contributor to the Investment Managers' excess relative performance was stock selection, with asset allocation largely being a consequence of the bottom-up investment process. The performance attribution analysis is set out below. Their report reviews the market and provides more detail on performance and the stocks and countries in which the Company is invested.

Revenue and Dividends

The Board's dividend policy, which remains unchanged, is to pay out the vast majority of the revenue available each year. This is set against the Company's objective of maximising capital growth and as a result the Investment Managers are not constrained to deliver income in any one financial year.

Net revenue return for the year amounted to £5.7 million (2015: £5.5 million). An interim dividend of 1.2 pence per share was paid on 15th January 2016. Subject to shareholder approval at the forthcoming Annual General Meeting, a final dividend of 2.0 pence per share will be paid on 7th July 2016 to shareholders on the register as at the close of business on 3rd June 2016 (ex dividend date 2nd June 2016).

Share Repurchases

The discount of the Company's share price to net asset value narrowed over the year from 13.0% to 10.8% at the year end. The Board continues to monitor the level of the discount carefully and seeks to use its ability to repurchase shares to minimise the short term volatility and the absolute level of the discount. However, no shares were repurchased during the year.

Corporate Governance

The Nomination and Remuneration Committee evaluates the operations of the Board, its Committees, individual Directors and the Chairman. In line with corporate governance best practice, all Directors seek annual reappointment.

During the year, the Management Engagement Committee undertook a formal review of the Manager, covering the investment management, company secretarial, administrative and marketing services provided to the Company. The review took into account the Manager's investment performance record, management processes, investment style, resources and risk control mechanisms. I am pleased to report that the Board agreed with the Committee's recommendation that the continued appointment of the Manager is very much in the interests of shareholders as a whole.

The Board

Nicholas Smith joined the Board in May 2015 and has succeeded Anthony Davidson, who retired at the AGM in July, as Chairman of the Audit Committee. Federico Marescotti will retire from the Board at the conclusion of this year's AGM. I would like to thank him for his contribution to the Board's deliberations, in particular in bringing a continental European perspective, over the past eleven years. All of the other Directors will stand for reappointment at the AGM. The Board is currently in the process of recruiting a new Director to join the Board and expects to make an appointment later this year.

Annual General Meeting

The Company's Annual General Meeting will be held at 60 Victoria Embankment, London EC4Y 0JP on Thursday, 30th June 2016 at 12.00 noon. The Investment Managers will make a presentation covering the past year and give their outlook for the current year. Shareholders are invited to join the Investment Managers and the Board for lunch following the Annual General Meeting when there will be opportunities for informal questions.

Outlook

Our Investment Managers continue to achieve strong performance relative to the market by good stock selection and have proven adept at navigating uncertain markets. Whilst they are optimistic about the prospects for European economic growth, we are living in very unusual financial conditions. It is nearly eight years since the financial crash and central banks still feel the need to actively suppress bond yields and interest rates in order to stimulate economic growth and drive inflation closer to their targets. It is hard to be very optimistic for the long term health of global stock markets until the central banks believe they can stop this extraordinary level of intervention. The forthcoming vote in the UK on EU membership adds further uncertainty.

Carolan Dobson

Chairman                                                                                                                                                                                                       

24th May 2016

 

Investment Manager's Report

Investment Scope and Process

The objective of the Company is to achieve capital growth from a portfolio of quoted smaller companies in Europe, excluding the United Kingdom. The investment universe is defined at the time of purchase by the countries and market capitalisation range of the constituents of the benchmark index, the Euromoney Smaller European Companies (ex UK) Index. At the end of March 2016 the index consisted of 1,000 companies with a market value of between £60 million and £4.0 billion across 15 countries, although Greece's exclusion from April 2016 will reduce this to 14. This universe of potential investments is screened using a proprietary multi-factor model, to the results of which we apply fundamental analysis.

The investment process is driven by bottom-up stock selection with a focus on identifying attractively priced, market leading growth companies with a catalyst for outperformance. Stock position sizing is determined by investment conviction and trading liquidity. Investments are sold when there is a fundamental negative change in business prospects, valuation or the market capitalisation has outgrown significantly the benchmark index. The Board has set a liquidity range of between 20% net cash and 20% gearing within which the Investment Managers may operate. The policy is not to hedge the currency exposure of the portfolio's assets.

Market Review

The 12 months under review proved to be more volatile than usual. The financial year started slowly, as pessimism surrounding the global economy and the newly elected Greek government's unwillingness to negotiate with the European Union led markets to move sideways within a volatile range. By mid July, although the Greek government finally accepted terms of a new bail out, markets turned their attention to the sustainability of the Chinese expansion, which had underpinned the momentum of global growth since the financial crisis. With a slowing economy the People's Bank of China responded by devaluing the yuan against the dollar by the largest amount in 20 years and implemented a further reduction in interest rates. Fears of contagion to other emerging markets led to sharp stock market falls during August. Despite these problems, a weak Euro combined with low commodity prices and a strong US economy lifted the gloom in the autumn and in the final quarter of 2015 markets recovered once again.

The start of the new calendar year saw volatility rise sharply once more. Markets fell from the first day of trading of 2016 on renewed concerns about the sustainability of the US and European economies in the face of continued emerging markets weakness. On 15th February, the ECB President Mr Draghi gave another of his now famous speeches to the European Parliament, saying the 'ECB would act if market turmoil weakens price stability' and that 'the ECB would not hesitate to act if needed'. Markets recovered sharply and were duly not disappointed by the raft of new easing measures announced at the ECB meeting in early March. For UK based investors the magnitude of the rise in European markets was further amplified by the weakness in sterling due to a slowdown in the UK economy.

In the 12 months to 31st March 2016 the large company MSCI Europe (ex UK) Index fell by 4.6% in sterling terms, driven by weakness in large commodity and financial stocks. Conversely, smaller companies, with much smaller exposures to those sectors, did better, rising by 7.2%.

Portfolio Performance

We are pleased to report that over the financial year the net asset value of the Company performed strongly, rising by 16.6%, largely through good stock selection and to a lesser extent asset allocation. The three largest contributors were all French, vindicating our overweight position in France during the year. Trigano, the European leader of recreational vehicles, topped the contributor list once again as demand for its recreational vehicles accelerated further. Other positive contributors included Faiveley Transport, a railway equipment manufacturer, as a US competitor made an offer for the company and Ubisoft Entertainment, the European leader in video game publishing, following Vivendi's unsolicited purchase of an 11% stake. Stocks which failed to deliver expected returns included French linen provider Elis on the break out of a price war in their domestic market, Swiss private bank EFG International on very poor results and the Italian cement manufacturer Cementir on continued weak domestic and Turkish demand. Biggest asset allocation contributions came from being underweight in Greece and Spain during the market turmoil resulting from the Greek elections. Finally, the use of gearing made a small negative contribution to performance due to the volatility of the markets, making gearing changes more difficult than usual.

Performance attribution
for the year ended 31st March 2016
	%	%
Contributions to total returns
Benchmark return		7.2
Asset allocation	3.1
Stock selection	7.5
Gearing/cash effect	-0.3
Currency effect	0.3
Investment Managers' added contribution		10.6
Portfolio total return		17.8
Management fee/other expenses	-1.2
Other effects		-1.2
Net asset value total return		16.6
Share price total return		19.7

Source: Datastream/JPMAM/Morningstar.

All figures are on a total return basis.

Performance attribution analyses how the Company achieved its recorded performance relative to its benchmark.

Portfolio Positioning

At the start of the year the portfolio had an overweight exposure to stocks likely to benefit from a global recovery, as evidenced by our large exposure to the industrial engineering sector. With the onset of the emerging market problems in mid August, we reduced this position in favour of more defensive growth companies. These included NetEnt, a Swedish provider of gambling software and IMCD, a Dutch specialty chemical distributor predominantly to the food and pharma industry. We also bought companies benefiting from a recovery in European consumer spending. These included OVS, the leading apparel retailer in Italy, Moleskine, the Italian provider of premium notebooks, Sopra Steria Group, the French IT services company and Alten, the French research and development consultant. We remained underweight in real estate and pharmaceuticals due to unattractive valuations.

The biggest shift at a country level was the reduction in the substantial overweight position in France which was the biggest contributor to performance during the year, by taking profits on Faiveley and Ubisoft following the aforementioned approaches. We found a lot of opportunities in the Netherlands, including several attractively priced IPOs such as Intertrust, the world leader in the provision of trust services and Flow Traders, the world leader in the liquidity provision for exchange traded products. In Italy we sold out of Cementir on a weaker outlook, Credito Emiliano, Banca Popolare Emilia Romagna and Banca Generali as the climate for financials deteriorated, while we increased our weighting in Norway through the purchase of two salmon farming providers, Salmar and Bakkafrost.

The level of gearing was reduced from 7.5% at the end of March 2015 to 2.8% cash at the end of March 2016, reflecting low conviction levels in the short term, but if the recovery takes hold as we expect, we will look to redeploy gearing.

Outlook

Despite the difficult and volatile markets that we are experiencing, the macroeconomic outlook on balance seems to be improving. We are becoming more constructive on the global economy for several reasons. President Draghi's additional quantitative easing has put pressure on the US Federal Reserve to keep its interest rate increases on hold. In turn this has weakened the US dollar which has been beneficial for commodities and emerging markets. This, coupled with a revival in European and Chinese lending, bodes well for an economic upturn of the global economy in the second half of this year, as evidenced from improving Citi economic surprise indices. A source of near term uncertainty is the referendum on Brexit and we continue to watch events closely.

Our more optimistic stance is reflected in our recent increase of our weighting to more cyclical industrial companies, whilst financing those by reducing defensive positions. Consequently, we are now overweight in sectors such as automobile components, software & computer services and travel & leisure, and underweight in healthcare and telecommunications.

Jim Campbell

Francesco Conte

Investment Managers                                                                                                                                                                                     

24th May 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 and 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 then 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 Underperformance and Strategy: An inappropriate investment strategy, for example excessive concentration of investments, asset allocation, the level of gearing or the degree of portfolio risk, may lead to underperformance against the Company's benchmark index and peer companies, which may result 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 Board sets strategic guidelines for gearing as well as investments. Once those are agreed, decisions on levels of gearing are delegated to the Investment Managers, whose decisions are subject to challenge by the Board. The Board holds a separate meeting devoted to strategy each year.

• Market and Currency: 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 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 JPMF. The Board monitors the implementation and results of the investment process with the Manager. The majority of the Company's assets, liabilities and income are denominated in Euros rather than in the Company's functional currency of sterling (in which it reports). As a result, movements in the Euro:sterling exchange rate may affect the sterling value of those items. Therefore, there is an inherent risk from these exchange rate movements. The fair value or future cash flows of a fnancial instrument held by the Company may fluctuate because of changes in market prices. This market risk comprises three elements - currency risk, interest rate risk and other price risk. Information to enable an evaluation of the nature and extent of these three elements of market risk is given in note 22(a) on pages 55 to 59 of the Annual Report to be published shortly, together with details of how the Board manages these risks. The Board has also identified the forthcoming vote on the UK's membership of the European Union as a risk. Should the UK vote to leave the EU, the impact on continental European companies is difficult to assess, however, it is likely to result in volatility in equity markets and on the Euro/sterling exchange rate.

• 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 may lose investment trust status and, as a consequence, gains within the Company's portfolio would be subject to capital gains tax. The Section 1158 qualification criteria are continually monitored by JPMF and the results reported to the Board each month. The Company must also comply with the provisions of the Companies Act 2006 and, since its shares are listed on the London Stock Exchange, the UKLA Listing Rules, Disclosure and Transparency Rules ('DTRs') and, as an investment trust, the Alternative Investment Fund Managers Directive ('AIFMD'). 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. Failure of the Manager to comply with the AIFMD could lead to the Manager losing its status as an Alternative Investment Fund Manager ('AIFM') and the Company would then need to change its AIFM. The Board relies on the services of its Company Secretary, the Manager and its professional advisers to ensure compliance with the Companies Act, the UKLA Listing Rules, DTRs and AIFMD.

• 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 Statement on pages 26 to 30 of the Annual Report.

• Operational and Cyber Crime: Loss of key staff by the Manager, such as the Investment Managers, could affect the performance of the Company. Disruption to, or failure of, the Manager's accounting, dealing or payments systems or the Depositary or Custodian's records may prevent accurate reporting and monitoring of the Company's financial position.  Under the terms of its agreement, the Depositary has strict liability for the loss or misappropriation of assets held in custody. See note 22 (c) of the financial statements in the Annual Report for further details on the responsibilities of the Depositary.  Details of how the Board monitors the services provided by JPMF and its associates and the key elements designed to provide effective risk management and internal controls are included within the Risk Management and Internal Controls section of the Corporate Governance Statement on pages 29 to 30 of the Annual Report. The threat of cyber attack, in all its guises, is regarded as at least as important as more traditional physical threats to business continuity and security. The Board has received the cyber security policies for its key third party service providers and JPMF has assured Directors that the Company benefits directly or indirectly from all elements of JPMorgan's Cyber Security programme. The information technology controls around the physical security of JPMorgan's data centres, security of its network and security of its trading applications are tested by Deloitte and reported every six months against the AAF Standard.

• 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 22 on pages 55 to 60 of the Annual Report.

Related Party Transactions

During the 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 year.

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 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 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.jpmeuropeansmallercompanies.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, Strategic Report, Statement of Corporate Governance and Directors' Remuneration Report that comply with that law and those regulations.

Each of the Directors, whose names and functions are listed on pages 21 and 22 of the Annual Report confirm 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; and

• the Strategic Report includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces.

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.

The Board also confirms that it is satisfied that the Strategic Report and Directors' Report include a fair review of the development and performance of the business, and the position of the Company, together with a description of the principle risks and uncertainties that the Company faces.

For and on behalf of the Board

Carolan Dobson

Chairman

24th May 2016
 

STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31ST MARCH 2016

		2016			2015
		Revenue	Capital	Total	Revenue	Capital	Total
		£'000	£'000	£'000	£'000	£'000	£'000
Gains/(losses) on investments held
at fair value through profit or loss		-	69,936	69,936	-	(8,060)	(8,060)
Net foreign currency (losses)/gains		-	(1,191)	(1,191)	-	7,229	7,229
Income from investments		8,357	-	8,357	8,427	-	8,427
Interest receivable and similar income		117	-	117	159	-	159
Gross return/(loss)		8,474	68,745	77,219	8,586	(831)	7,755
Management fee		(1,345)	(3,139)	(4,484)	(1,336)	(3,117)	(4,453)
Other administrative expenses		(818)	-	(818)	(694)	-	(694)
Net return/(loss) on ordinary activities
before finance costs and taxation		6,311	65,606	71,917	6,556	(3,948)	2,608
Finance costs		(240)	(560)	(800)	(290)	(676)	(966)
Net return/(loss) on ordinary activities
before taxation		6,071	65,046	71,117	6,266	(4,624)	1,642
Taxation		(339)	-	(339)	(747)	-	(747)
Net return/(loss) on ordinary activities
after taxation		5,732	65,046	70,778	5,519	(4,624)	895
Return/(loss) per share (note 3)		3.58p	40.62p	44.20p	3.45p	(2.89)p	0.56p

A final dividend of 2.0p per share (2015: 2.0p per share) is proposed in respect of the year ended 31st March 2016, costing £3,203,000 (2015: £3,203,000). More details can be found in note 2 below.

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 FOR THE YEAR ENDED 31ST MARCH 2016

	Called up		Capital
	share	Share	redemption	Capital	Revenue
	capital	premium	reserve	reserves	reserve1	Total
	£'000	£'000	£'000	£'000	£'000	£'000
At 31st March 2014	8,008	1,312	7,628	411,139	5,406	433,493
Expenses incurred due to stock split	-	-	-	(16)	-	(16)
Net (loss)/return on ordinary activities	-	-	-	(4,624)	5,519	895
Dividends paid in the year	-	-	-	-	(4,645)	(4,645)
At 31st March 2015	8,008	1,312	7,628	406,499	6,280	429,727
Net return on ordinary activities	-	-	-	65,046	5,732	70,778
Dividends paid in the year	-	-	-	-	(5,125)	(5,125)
At 31st March 2016	8,008	1,312	7,628	471,545	6,887	495,380

¹     This reserve forms the distributable reserve of the Company and may be used to fund distribution of profits to investors via dividend payments.

STATEMENT OF FINANCIAL POSITION AT 31ST MARCH 2016

		2016	2015
		£'000	£'000
Fixed assets
Investments held at fair value through profit or loss		482,590	465,221
Current assets
Derivative financial instruments		1	-
Debtors		2,889	6,322
Cash and cash equivalents1		53,392	11,292
		56,282	17,614
Current liabilities
Creditors: amounts falling due within one year		(43,492)	(9,699)
Net current assets		12,790	7,915
Total assets less current liabilities		495,380	473,136
Creditors: amounts falling due after more than one year		-	(43,409)
Net assets		495,380	429,727
Capital and reserves
Called up share capital		8,008	8,008
Share premium		1,312	1,312
Capital redemption reserve		7,628	7,628
Capital reserves		471,545	406,499
Revenue reserve		6,887	6,280
Total shareholders' funds		495,380	429,727
Net asset value per share (note 4)		309.3p	268.3p

¹     This line item combines the two lines of 'Investments in liquidity funds held at fair value through profit or loss' and 'Cash and short term deposits' in the financial statements for the year ended 31st March 2015 into one. Under FRS 102, liquidity funds are considered cash equivalents as they are held for cash management purposes.

Company registration number: 2431143.

STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31ST MARCH 2016

		2016	2015
		£'000	£'000
Net cash outflow from operations before dividends and interest		(2,578)	(5,936)
Dividends received		6,497	7,084
Interest received		9	21
Overseas tax recovered		249	518
Interest paid		(769)	(974)
Net cash inflow from operating activities		3,408	713
Purchases of investments		(881,746)	(883,929)
Sales of investments		933,115	904,735
Settlement of foreign currency contracts		(62)	(410)
Net cash inflow from investing activities		51,307	20,396
Dividends paid		(5,125)	(4,645)
Net repayment of bank loans		(7,520)	(20,585)
Expenses incurred due to stock split		-	(16)
Net cash outflow from financing activities		(12,645)	(25,246)
Increase/(decrease) in cash and cash equivalents		42,070	(4,137)
Cash and cash equivalents at start of year		11,292	15,437
Exchange movements		30	(8)
Cash and cash equivalents at end of year		53,392	11,292
Increase/(decrease) in cash and cash equivalents		42,070	(4,137)
Cash and cash equivalents consist of:
Cash and short term deposits		6,248	1,300
Cash held in JPMorgan Euro Liquidity Fund		47,144	9,992
Total		53,392	11,292

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2016

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 with the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' (the 'SORP') issued by the Association of Investment Companies 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.   Dividends

(a)  Dividends paid and proposed

	2016	2015
	£'000	£'000
Dividends paid
2015 final dividend of 2.0p (2014: 1.7p) per share	3,203	2,723
Interim dividend of 1.2p (2015: 1.2p) per share	1,922	1,922
Total dividends paid in the year	5,125	4,645
Dividend proposed
2016 final dividend of 2.0p (2015: 2.0p) per share	3,203	3,203

The final dividend has been proposed in respect of the year ended 31st March 2016 and is subject to approval at the forthcoming Annual General Meeting. In accordance with the accounting policy of the Company, this dividend will be reflected in the financial statements for the year ending 31st March 2017.

3.   Return/(loss) per share

	2016	2015
	£'000	£'000
Revenue return	5,732	5,519
Capital return/(loss)	65,046	(4,624)
Total return	70,778	895
Weighted average number of shares in issue during the year	160,147,885	160,147,885
Revenue return per share	3.58p	3.45p
Capital return/(loss) per share	40.62p	(2.89)p
Total return per share	44.20p	0.56p

4.   Net asset value per share

	2016	2015
Net assets (£'000)	495,380	429,727
Number of shares in issue	160,147,885	160,147,885
Net asset value per share	309.3p	268.3p

5.   Status of results announcement

2015 Financial Information

The figures and financial information for 2015 are extracted from the published Annual Report and Accounts for the year ended 31^st March 2015 and do not constitute the statutory accounts for that year.  The Annual Report and Accounts have 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.

2016 Financial Information

             The figures and financial information for 2016 are extracted from the Annual Report and Accounts for the year ended 31^st March 2016 and do not constitute the statutory accounts for the year.  The Annual Report and Accounts include 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 Register 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

24th May 2016

For further information:

Jonathan Latter,

JPMorgan Funds Limited

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.jpmeuropeansmallercompanies.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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