Final Results

RNS Number : 8020S

JPMorgan Overseas IT PLC

29 September 2014

 



LONDON STOCK EXCHANGE ANNOUNCEMENT

JPMORGAN OVERSEAS INVESTMENT TRUST PLC

FINAL RESULTS FOR THE YEAR ENDED
30TH JUNE 2014

Chairman's Statement

Over the year to 30th June 2014, equities continued to rise strongly as economies around the world showed signs of recovery amid a prolonged period of low interest rates. Despite the many geopolitical and economic challenges, most developed equity markets rose over the period, with some reaching record highs.

This has been another very positive year for the Company while it continued to deliver a strong performance during the financial year. The Company recorded a total return on net assets of +13.7%, ahead of the total return of +9.1% of the benchmark, the MSCI All Country World Index (in sterling terms). The total return to shareholders was +13.2% over the reporting period.

It is pleasing to note the Company's impressive net asset value total return over five years of +104.8%, ahead of the benchmark return of +87.7% and over 10 years of +153.1%, significantly outperforming the benchmark which returned +107.6% over the same period.

The Investment Manager's Report provides a detailed commentary on the Company's investment strategy and performance.

Dividends

The Directors are proposing, subject to shareholders' approval at the Annual General Meeting ('AGM'), to pay a final dividend of 15.0 pence per share (2013: 15.0 pence) on 5th December 2014 to shareholders on the register at the close of business on 7th November 2014. The Company's principal aim is to maximise capital growth. The Board does however appreciate that many shareholders do like to receive a dividend rather than have to sell shares to obtain income.

Share Buybacks and Issuance

Over the year, the share price to net asset value discount ranged between 2.9% and 7.7%. The Board will continue to manage the discount at which the share price trades relative to its net asset value at around 5% and should it become necessary, repurchase the Company's shares in the market to achieve this. The Company repurchased 489,215 Ordinary shares into Treasury for a total consideration of £4,553,000. At the year end, a total of 3,172,803 shares were held in Treasury.

During the year, 282,707 Ordinary shares were issued upon exercise of Subscription shares. At the year end there were 4,523,695 Subscription shares in issue. Details of another opportunity to exercise the Subscription shares at 943 pence by 31st October 2014 have been sent to shareholders and are also given on page 67 of the Annual Report and Accounts.

A resolution to renew the authority to permit the Company to continue to repurchase shares will be submitted to the AGM. Resolutions renewing the authorities to issue shares from Treasury and to issue new shares at a premium to net asset value, and to disapply pre-emption rights over such issues, will also be submitted for approval at the AGM. Any shares held in Treasury will only be re-issued at a premium to net asset value.

Ongoing Charges

The Board continues to believe that the Company's ongoing charges (excluding performance fees) ratio of 0.63% for the year ended 30th June 2014 (2013: 0.65%) represents very good value when compared to other trusts and savings products such as open ended funds actively investing in global equities.

Gearing

Gearing is regularly discussed between the Board and the Investment Manager. A borrowing facility of £25 million with National Australia Bank is in place until July 2015. This facility is flexible and can be used tactically as investment opportunities present themselves. £20 million of the £25 million facility was drawn down at the year-end. As in previous financial years, the Investment Manager continued to make effective use of gearing which contributed +1.4% to performance during the year under review.

Currency Hedging

The Company continues its passive currency hedging strategy (implemented in late 2008) that aims to make stock selection the predominant driver of overall portfolio performance relative to the benchmark, the MSCI World All Countries Index (in sterling terms). This is a risk reduction measure, designed to eliminate most of the differences between the portfolio's currency exposure and that of the Company's benchmark. As a result the returns derived from, and the portfolio's exposure to currencies may differ materially from that of the Company's competitors in the AIC Global Growth sector, who generally do not undertake such a strategy.

Alternative Investment Fund Managers Directive ('AIFMD' or the 'Directive')

The Company was required to comply with the Alternative Investment Fund Managers Directive ('AIFMD') before 22nd July 2014. As a result of this new European legislation and its incorporation into the local law and regulations in the UK, the Company has made a number of changes to its service providers to bring it into compliance with the AIFMD from 1st July 2014. The Company has appointed JPMorgan Funds Limited ('JPMF'), an affiliate of JPMorgan Asset Management (UK) Limited ('JPMAM') as its Alternative Investment Fund Manager ('AIFM') subject to the terms and conditions of a new investment management agreement. This new agreement leaves the Managers' remuneration and other commercial terms unchanged from the preceding agreement with JPMAM. From a portfolio management perspective, there will be no change in the resources or team working on behalf of the Trust as JPMF has delegated portfolio management to JPMAM. JPMF also acts as the new Company Secretary from 1st July 2014, replacing JPMAM in the role.

In complying with the AIFMD, the Company has also appointed Bank of New York Mellon to act as its Depositary from 1st July 2014. The Company's Custodian, JPMorgan Chase Bank will remain as the Custodian as a delegate of the Depositary.

The Board

Having had the pleasure of serving as a Director since 1999 and of chairing the Board since 2010, I plan to step down from the Board at the conclusion of the 2015 AGM. I am pleased to inform you that Nigel Wightman, who has been a Director since 2010, has been selected to succeed me as Chairman when I retire. As part of the Board's succession planning and in anticipation of my retirement, the Board is currently considering recruitment of another non-executive Director to the Board.

The Board supports annual re-election for all Directors, as recommended by the UK Corporate Governance Code, and therefore all of the Directors will stand for re-election at the forthcoming AGM.

Annual General Meeting

My fellow Directors and I invite you to attend the Company's AGM which will be held at 60 Victoria Embankment, London EC4Y 0JP on Tuesday, 11th November 2014 at 12.00 noon. An investment presentation will be made at the meeting by Jeroen Huysinga. If you have any detailed or technical questions, please submit these in advance of the meeting in writing, or via the Company's website, to the Company Secretary whose contact details are shown on page 73 of the Annual Report and Accounts. Shareholders who are unable to attend the AGM in person are encouraged to use their proxy votes.

There will be an opportunity for shareholders to meet the Directors and the Investment Manager following the AGM. I hope to have the pleasure of meeting you then.

Outlook

While the global economy continues to expand at a moderate pace, the challenges within global financial markets remain both significant and large in number. A great deal of investor anxiety lies beneath the calm surface as the attention of Western authorities focuses on inflation and the timing of possible interest rate rises. Meanwhile, policy change at both economic and political level continues to be a distortive market force with returns in the short to medium term likely to be muted. Despite this testing and changeable investment backdrop, the Investment Manager believes active management is set to remain a key driver of investment returns over the longer term as many positive investment opportunities are taken advantage of.

Simon Davies

Chairman

26th September 2014

Investment Manager's Report

Market review

Over the last 12 months we have continued to see strong performance from global equity markets. As ever, there was a considerable range of returns across regions. The US led the pack as signs of an economy recovery started to gather pace and the Federal Reserve (Fed) began reducing the economic stimulus that has been in play since the financial crisis. Closely behind North America was Europe which broke out of its longest ever recession with markets responding positively. More recently, however, as geopolitical events surrounding Russia and Ukraine started to dominate the headlines investors became nervous that any recovery could be derailed and the European Central Bank (ECB) moved to reassure the market that it remained committed to supporting the recovery.

Marking a reversal on the previous 12 months, Japan was the worst performing region and weakness in the Japanese Yen meant that the market posted negative returns in Sterling. Following the election of Shinzo Abe as Prime Minister in December 2012, Japan has launched one of the most aggressive policy moves in the country's history, seeking to revive the world's third largest economy which has been stagnant for two decades. This change was initially well received by investors, however an increase in the consumption tax in April 2014 stoked fears that the economy's fragile recovery could stall. These fears were somewhat mitigated as Shinzo Abe unveiled his third and final 'arrow' of reform, which included promises to reduce the corporate tax rate - currently one of the world's highest.

As the major western economies continued to improve, particularly the UK and US, expectations for increases in interest rates were brought forward. This has led to concerns that the significant flows of money we have seen move into emerging markets over the last five years driven by the search for higher returns, could be reversed. This uncertainty, coupled with currency weakness, rising inflation and concerns over the banking system in China led emerging markets to lag most developed markets, despite many continuing to see much higher growth.

Portfolio Review

Over the 12 months to end June 2014, the portfolio outperformed the index by approximately 4.6% driven by positive stock selection across the majority of regions and sectors. We have been encouraged to see a turnaround in the performance of a number of our holdings in more economically sensitive cyclical sectors. This included a position in UPM, the Finnish paper company exposed to a consolidating industry and an improving pulp market as well as Outokumpu, which is benefiting from a turnaround in the European stainless steel market. Additionally, Outokumpu has taken steps to reduce its level of debt which had increased post the acquisition of ThyssenKrupp's stainless steel division last year. Shares in each of these companies gained more than 70% over the period.

Stock selection in healthcare also contributed positively as a number of our holdings were subject to takeover offers; such as UK-based pharmaceutical company, Shire, which rose sharply after the company received an offer from Abbvie; US-based biotech company, Onyx, which Amgen bid for as well as botox producer, Allergen, which received a hostile offer from Valeant. All three stocks rallied strongly and were subsequently sold in the portfolio.

Stock selection was positive in all regions with the exception of Japan which modestly dragged on performance as our focus on exporters and financials detracted in the first half of 2014.

Our underweight exposure to emerging markets contributed positively as the region continued to lag most developed markets. At the stock level, our holding in Sands China, the Hong Kong-listed operator of casinos and resorts in Macau, was among the stocks to contribute positively. The company benefited from increasing sales at Macau casinos as operators continue to add rooms and entertainment in order to draw a growing number of affluent and middle class customers. We sold our position in the company earlier this year. Towards the end of 2013 we initiated a position in India's largest private sector bank, ICICI, which has performed strongly this year. Political elections in India saw Narendra Modi announced Prime Minister and sparked speculation of reform measures to invigorate the country's stalled growth. Additionally, ICICI announced positive 2013 results benefiting from continued loan growth. Banking penetration in India is amongst the lowest in the world; at a third of China's and a fifth of the US - which presents a significant opportunity over the long-term. We maintain our holding given ICICI's attractive valuation, strong earnings growth potential and stable balance sheet.

Portfolio positioning

We have not made any significant changes to the overall shape of the portfolio and maintain our overweight exposure to a number of more economically sensitive cyclical sectors such as basic industries, industrial cyclicals and autos. Our focus remains on stock picking which has been the main source of returns. Geographically, our investment process of identifying companies which are attractively valued relative to global peers continues to lead us towards Europe and the UK and away from North America. The valuation disparity between these two markets remains attractive. A large proportion of our underweight position in the US is due to our lack of exposure to certain extremely large consumer staple companies which we believe are simply too expensive in their global context. Holdings in companies such as SABMiller, Henkel and Japan Tobacco provide us with exposure to interesting themes in this sector at valuations which are much lower than those of their US peers.

Earlier in 2013 we reduced our position in emerging markets to approximately 7% underweight at the end of June 2013. As valuations have continued to decline, these regions have started to look increasingly attractive in a global context. There remains, however, much uncertainty over the near-term outlook for these economies and as such we believe that selectivity is key. We have increased our position, although remain around 3% underweight relative to the index. Specifically, we initiated a position in Mr. Price, the South African low-cost retailer which is winning market share in its domestic market with the potential for overseas expansion through its online business. We also took a position in ICICI, the Indian bank and Bidvest, a South African-based food distribution and services company.

We have added to our position in Japan resulting in a modest overweight relative to the benchmark. We believe foreign investors have become unduly pessimistic about the trajectory of the Japanese economy. This year investors have cut their positions due to disappointment over the BoJ's perceived inaction, and concerns that progress in structural reform is lacking. We believe the BoJ will remain committed to supporting inflationary pressures in the Japanese economy and will increase its programme of stimulus measures, if required. In terms of the 'third arrow' of reform, Prime Minister Shinzo Abe's public approval ratings remain high, giving him the mandate to pursue economic reforms such as special economic zones, free trade agreements and deregulation. On the basis of our proprietary valuation model, Japanese financials look very compelling by comparison with recently re-rated European peripheral financials. We maintained our existing positions in Japanese bank, Orix, and added Mitsubishi UFJ to the portfolio.

Market Outlook

While we are unlikely to see the dramatic performance in equity markets that was experienced over the last 12 months, we remain positive in our outlook for equities. The key drivers remain in place, namely improving global growth, accommodative monetary policy, and still-supportive valuations. The company results season has seen some of this economic growth feed through into corporate earnings, the anticipation of which drove much of the valuation multiple expansion over the last year. An environment such as this would typically be positive for more economically sensitive, cyclical areas of the market. Continued M&A activity would also be supportive of equity markets. Corporate deals have soared this year amid renewed confidence from company management teams with company margins at all time highs and cash flows generation strong. Looking forward, we will need to see continued economic growth and sensible central bank policy guidance for this to continue.

Investors will be keenly monitoring the resilience of the global economy in the face of possible rising interest rates, as the continuing strength of the US economy and improving labour market has brought forward expectations of rate rises. This need not be threatening for financial markets and economic growth, provided the US Federal Reserve communicates any interest rate increase with the same clarity and consistency as they did in reducing the economic stimulus. In contrast, in Europe, the economic and company earnings outlook remains less assured and in the advent of weaker inflation data, the European Central Bank may consider further stimulus as a last resort.

We have maintained a degree of gearing in the portfolio, driven by improving economic sentiment, corporate resiliency and attractive valuation signals across a number of holdings. Our focus remains on underlying company fundamentals and our dedicated team of highly experienced research analysts continue to identify attractive investment opportunities around the world.

Jeroen Huysinga

Investment Manager

26th September 2014

Directors' Report

Principal Risks

With the assistance of the Manager, the Board has drawn up a risk matrix, which identifies the key risks to 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 under-performance 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 by the Manager. The Manager 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 Manager, who attends all Board meetings, and reviews data which show statistical measures of the Company's risk profile. The Investment Manager employs the Company's gearing within a strategic range set by the Board. The Board may hold 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 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'). Details of the Company's approval are given under 'Structure of the Company' within the Business Review section above. 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 2006 and, since its shares are listed on the London Stock Exchange, the UKLA Listing Rules. A breach of the Companies Act 2006 could result in the Company and/or the Directors being fined or the subject of criminal proceedings. Breach of the UKLA Listing Rules 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 to ensure compliance with the Companies Acts and The UKLA Listing Rules.

•     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 on pages 25 to 30 of the Annual Report and Accounts.

•     Operational: Loss of key staff by the Manager, such as the Investment Manager, could affect the performance of the Company. Disruption to, or failure of, the Manager 's accounting, dealing or payments systems or the custodian's records could prevent accurate reporting and monitoring of the Company's financial position. 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 with the Internal Control section of the Corporate Governance report on page 28 of the Annual Report and Accounts.

•     Going concern: Pursuant to the Sharman Report, Boards are now advised to consider going concern as a potential risk, whether or not there is an apparent issue arising in relation thereto. Going concern is considered rigorously on an ongoing basis and the Board's statement on going concern is detailed on page 23 of the Annual Report and Accounts.

•     Financial: The financial risks faced by the Company include market price risk, interest rate risk, liability risk and credit risk. Further details are disclosed in note 26 on pages 56 to 62 of the Annual Report and Accounts.

Future Developments

Clearly, the future development of the Company is much dependent upon the success of the Company's investment strategy in the light of economic and equity market developments and the continued support of its shareholders. The Investment Managers discuss the outlook in their report on pages 7 and 8 of the Annual Report and Accounts.

Statement of Directors' Responsibilities

The Directors are responsible for preparing the annual report and the 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 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.

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.jpmoverseas.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 auditor accepts 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 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 and Accounts 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.

For and on behalf of the Board

Simon Davies

Chairman

26th September 2014

Income Statement

for the year ended 30th June 2014

			2014			2013
		Revenue	Capital	Total	Revenue	Capital	Total
		£'000	£'000	£'000	£'000	£'000	£'000
Gains on investments held at fair value   through profit or loss		-	31,243	31,243	-	37,692	37,692
Net foreign currency losses		-	(1,609)	(1,609)	-	(1,421)	(1,421)
Income from investments		4,405	-	4,405	5,329	-	5,329
Other interest receivable and similar income		73	-	73	179	-	179
Gross return		4,478	29,634	34,112	5,508	36,271	41,779
Management fee		(499)	(499)	(998)	(440)	(440)	(880)
Performance fee - (charge)/writeback		-	(1,791)	(1,791)	-	26	26
Other administrative expenses		(497)	-	(497)	(491)	-	(491)
Net return on ordinary activities before   finance costs and taxation		3,482	27,344	30,826	4,577	35,857	40,434
Finance costs		(212)	(212)	(424)	(169)	(169)	(338)
Net return on ordinary activities before   taxation		3,270	27,132	30,402	4,408	35,688	40,096
Taxation		(355)	-	(355)	(398)	-	(398)
Net return on ordinary activities after taxation		2,915	27,132	30,047	4,010	35,688	39,698
Return per share - undiluted (note 3)		12.41p	115.55p	127.96p	16.56p	147.39p	163.95p
Return per share - diluted (note 3)		12.41p	115.55p	127.96p	16.56p	147.39p	163.95p

Details of the proposed dividend are given in note 2.

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. The Total column represents all the information that is required to be disclosed in a Statement of Total Recognised Gains and Losses ('STRGL'). For this reason a STRGL has not been presented.

Reconciliation of Movements in Shareholders' Funds

	Called up	Share	Capital
	share	premium	redemption	Capital	Revenue
	capital	account	reserve	reserves	reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000
At 30th June 2012	6,544	1,015	27,401	147,241	17,738	199,939
Repurchase of shares into Treasury	-	-	-	(14,974)	-	(14,974)
Bonus issue of Subscription shares	48	(48)	-	-	-	-
Subscription shares issue costs	-	(233)	-	-	-	(233)
Net return on ordinary activities	-	-	-	35,688	4,010	39,698
Dividends appropriated in the year	-	-	-	-	(3,285)	(3,285)
At 30th June 2013	6,592	734	27,401	167,955	18,463	221,145
Repurchase of shares into Treasury	-	-	-	(4,553)	-	(4,553)
Exercise of Subscription shares into Ordinary shares	(3)	3	-	-	-	-
Issue of Ordinary shares on exercise of Subscription shares	71	2,476	-	-	-	2,547
Net return on ordinary activities	-	-	-	27,132	2,915	30,047
Dividends appropriated in the year	-	-	-	-	(3,551)	(3,551)
At 30th June 2014	6,660	3,213	27,401	190,534	17,827	245,635

Balance Sheet

at 30th June 2014

		2014	2013
		£'000	£'000
Fixed assets
Investments held at fair value through profit or loss		265,685	240,016
Investment in liquidity fund held at fair value through profit or loss		-	3,000
Total investments		265,685	243,016
Current assets
Financial assets: Derivative financial instruments		1,361	938
Debtors		1,639	2,443
Cash and short term deposits		2,568	1,966
		5,568	5,347
Creditors: amounts falling due within one year		(23,340)	(5,504)
Financial liabilities: Derivative financial instruments		(735)	(1,455)
Net current liabilities		(18,507)	(1,612)
Total assets less current liabilities		247,178	241,404
Creditors: amounts falling due after more than one year		(200)	(20,200)
Provisions for liabilities and charges
Performance fee payable		(1,343)	(59)
Net assets		245,635	221,145
Capital and reserves
Called up share capital		6,660	6,592
Share premium account		3,213	734
Capital redemption reserve		27,401	27,401
Capital reserves		190,534	167,955
Revenue reserve		17,827	18,463
Total equity shareholders' funds		245,635	221,145
Net asset value per share - undiluted (note 4)		1,054.9p	941.4p
Net asset value per share - diluted (note 4)		1,036.7p	934.4p

The Company's registration number is 24299.

Cash Flow Statement

for the year ended 30th June 2014

		2014	2013
		£'000	£'000
Net cash inflow from operating activities		2,545	3,510
Returns on investments and servicing of finance
Interest paid		(422)	(352)
Net cash outflow from returns on investments and servicing of finance		(422)	(352)
Taxation
Taxation recovered		115	40
Capital expenditure and financial investment
Purchases of investments		(164,561)	(205,163)
Sales of investments		171,763	200,967
Other capital charges		(15)	(16)
Net cash inflow/(outflow) from capital expenditure and financial investment		7,187	(4,212)
Dividend paid		(3,551)	(3,285)
Net cash inflow/(outflow) before financing		5,874	(4,299)
Financing
Issue of Ordinary shares on exercise of Subscription shares		2,547	-
Repurchase of shares into Treasury		(5,068)	(14,954)
Subscription share issue expenses		-	(233)
Drawdown of bank loan		-	20,000
Net cash (outflow)/inflow from financing		(2,521)	4,813
Increase in cash for the year		3,353	514

The notes on pages 42 to 63 form an integral part of these accounts.

Notes to the Accounts

for the year ended 30th June 2014

1.    Accounting policies

      Basis of accounting

      The accounts are prepared in accordance with the Companies Act 2006, 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 'SORP') issued by the Association of Investment Companies in January 2009.

      All of the Company's operations are of a continuing nature.

      The accounts have been prepared on a going concern basis under the historical cost convention as modified by the revaluation of investments and derivative financial instruments at fair value through profit or loss.

      The policies applied in these accounts are consistent with those applied in the preceding year.

2.   Dividend

(a)  Dividends paid and proposed

	2014	2013
	£'000	£'000
Dividend paid
Unclaimed dividends refunded to the Company	(5)	(4)
2013 final dividend of 15.0p (2012: 13.5p)	3,556	3,289
Total dividends paid in the year	3,551	3,285
Dividend proposed
2014 final dividend proposed of 15.0p (2013: 15.0p)	3,493	3,524

      For the year ended 30th June 2013, the Company declared a dividend of £3,524,000 but the final dividend paid amounted to £3,556,000 due to issue of Ordinary shares on exercise of Subscription shares after the balance sheet date but prior to the share register record date.

      The final dividend proposed in respect of the year ended 30th June 2014 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 accounts for the year ending 30th June 2015.

(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 follows:

	2014	2013
	£'000	£'000
Final dividend payable of 15.0p (2013: 15.0p)	3,493	3,524
Total dividends for Section 1158 purposes	3,493	3,524

      The revenue available for distribution by way of dividend for the year is £2,915,000 (2013: £4,010,000).

3.   Return per share

	2014	2013
	£'000	£'000
Revenue return	2,915	4,010
Capital return	27,132	35,688
Total return	30,047	39,698
Weighted average number of Ordinary shares in issue during the period used for the purpose   of the undiluted calculation	23,480,245	24,212,969
Weighted average number of Ordinary shares in issue during the period used for the purpose   of the diluted calculation	23,480,245	24,212,969
Undiluted
Revenue return per share	12.41p	16.56p
Capital return per share	115.55p	147.39p
Total return	127.96p	163.95p
Diluted
Revenue return per share	12.41p	16.56p
Capital return per share	115.55p	147.39p
Total return	127.96p	163.95p

      On 15th January 2013, the Company issued Subscription shares as a bonus issue to Ordinary shareholders as detailed on page 67 of the Annual Report and Accounts. Accordingly, we disclose above the diluted returns per Ordinary share in addition to the undiluted returns per Ordinary share.

      The diluted return per Ordinary share represents the return on ordinary activities after taxation divided by the weighted average number of Ordinary shares in issue during the year as adjusted in accordance with the requirements of Financial Reporting Standard 22 'Earnings per share'.

4.   Net asset value per share

	2014	2013
Undiluted
Ordinary shareholders' funds (£'000)	245,635	221,145
Number of Ordinary shares in issue	23,284,602	23,491,110
Net asset value per Ordinary share (pence)	1,054.9	941.4
Diluted
Ordinary shareholders funds assuming exercise of Subscription shares (£'000)	288,293	264,402
Number of potential Ordinary shares in issue	27,808,297	28,297,512
Net asset value per Ordinary share (pence)	1,036.7	934.4

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 ASSET MANAGEMENT (UK) LIMITED

26th September 2014

For further information please contact:

Divya Amin

For and on behalf of

JPMorgan Funds Limited, Secretary                                                                                                                  

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.jpmoverseas.co.uk

 where up to date information on the Company, including daily NAV and share prices, factsheets and portfolio information can also be found.

 

END

 

 

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