Final Results

JP Morgan Mid Cap Invest Trust PLC 27 September 2006 LONDON STOCK EXCHANGE ANNOUNCEMENT JPMORGAN MID CAP INVESTMENT TRUST PLC UNAUDITED FINAL RESULTS FOR THE YEAR ENDED 30TH JUNE 2006 Results + 48.9% Return to shareholders (2005: + 25.6%) + 41.3% Return on net assets (2005: + 21.8%) + 31.8% Benchmark return (2005: + 20.2%) + 10.6% Dividend 12.50p (2005: 11.30p) Investment Performance I am delighted to be able to report a third consecutive year of outperformance. Over the last twelve months the Company achieved a total return on net assets per share of 41.3%, significantly outperforming the benchmark's return of 31.8%. Even more impressive was the Company's return to shareholders (share price and net dividend), at 48.9% reflecting the strong positive return on assets and the narrowing of the discount from 16.8% to 12.4% at the year end. The objective we set our Manager is to achieve capital growth through investing in medium-sized UK companies. The main measurement of the Manager's performance we take as the FTSE 250 index (excluding investment trusts). It is pleasing to note that the major positive contributor to performance this year was stock selection, with gearing and the enhancement of net asset value through share buybacks also adding to returns. The Board thoroughly and regularly reviews the Manager's investment strategy and process. Gearing For much of the year, the Company's level of gearing remained steady at around the 112% to 114% level. In order to take advantage of the market setback in May 2006 gearing was increased to 117%. Gearing added 3.5% to the Company's returns for the year. Revenue and Dividends Net revenue after taxation for the year was £4,380,000 (2005: £4,383,000) and earnings per share were 13.15p (2005: 12.07p). In my statement last year, I noted the increasing importance of income to shareholders, and that, with this in mind, the Board had decided to establish a policy to increase dividends annually at least in line with inflation, as long as normal market conditions prevailed. In addition, a decision was made to rebalance the split between the interim and final dividend and, to this end, an interim dividend of 4.00p per share (2005: 3.00p) was paid in April 2006. Having increased the interim dividend in this way, the Board is pleased to recommend a modestly higher final dividend of 8.50p per share making a total of 12.50p (2005: 11.30p) which is an increase in the total dividend of 10.6% on last year. This dividend is payable on 10th November 2006 to shareholders on the register at the close of business on 6th October 2006. Accounting Standards Following the introduction of new financial reporting standards in 2005 there have been a number of significant amendments this year to the accounting policies of the Company. This has resulted in a revised layout for the Income Statement (previously called the Statement of Total Return) and a new Reconciliation of Movements in Shareholders' Funds statement. One of the main effects of the new accounting standards is to exclude the amount of the proposed final dividend from the accounts of the Company as this item is no longer viewed as a potential liability. The year-end net asset value per share numbers for the Company are therefore 8.50p per share higher than would otherwise be the case. Comparative numbers have also been adjusted for 2005. Share Buy-backs It is the present intention of the board to continue its policy of buying back shares where appropriate to enhance net asset value per share. This policy will be reviewed regularly in the light of market conditions. It is not our present intention to seek authority to issue treasury shares. The Company repurchased a total of 3,031,000 shares, representing 11.2% of the issued share capital, since the renewal of the Board's authority to repurchase up to 14.99% of the Company's shares for cancellation on 2nd November 2005. Share buy-backs added 2.1% to the Company's returns for the year. Since 30th June 2006 the Company has repurchased a further 673,000 shares representing 2.16% of the issued share capital. This process has added 0.1% to the net asset value of the remaining shares. The Directors continue to believe that this mechanism is of benefit to shareholders and therefore propose and recommend that powers to repurchase up to 14.99% of the Company's shares for cancellation be renewed for a further period. Investment Manager The Board has reviewed the investment management, secretarial and marketing services provided to the Company by JPMorgan Asset Management (UK) Limited (' JPMAM'). This annual review has included their performance record, management processes, investment approach, resources and risk control mechanisms. The Board was satisfied with the results of the review and therefore in the opinion of the Directors, the continuing appointment of JPMAM for the provision of these services is in the best interests of shareholders. Annual General Meeting This year's Annual General Meeting will be held on 7th November 2006 at 12 noon at The Library, JPMorgan's Offices, 60 Victoria Embankment, London EC4Y 0JP. As in previous years, in addition to the formal part of the meeting, there will be a presentation from the Investment Managers who will answer questions on the portfolio and performance. There will also be an opportunity to meet the Board, the Investment Managers and representatives of JPMorgan after the meeting. Prospects As has been the case in each of the last three years, the FTSE 250 Index again outperformed its larger capitalised counterparts over the last year. Despite the length of this period of outperformance the Manager continues to believe that the outlook for mid-cap stocks is attractive, a view which we share. Mid-cap stocks are expected to deliver double digit profits and dividend growth in 2006 and 2007, with growth in 2007 expected to be almost double that for the large cap market, whilst forward valuation measures for mid-cap stocks in general are undemanding. As we have also commented upon in previous reports, the greater focus of mid-cap stocks on domestic earnings and healthy levels of corporate activity, also add to the attractions of this market segment. Andrew Barker Chairman 27th September 2006 For further information please contact: Andrew Norman, JPMorgan Asset Management (UK) Limited ............ 020 7742 6000 JPMorgan Mid Cap Investment Trust plc Unaudited figures for the year ended 30th June 2006 Income Statement 2005 2006 (Restated)* Revenue Capital Total Revenue Capital Total return return return return return return £'000 £'000 £'000 £'000 £'000 £'000 Gains from investments held at fair value through profit or loss - 58,752 58,752 - 25,639 25,639 Income from investments 5,557 - 5,557 5,490 - 5,490 Other interest receivable and similar 54 - 54 145 - 145 income _______ ________ _______ _______ ________ _______ Gross return 5,611 58,752 64,363 5,635 25,639 31,274 Management fee (293) (684) (977) (254) (593) (847) Other administrative expenses (311) - (311) (321) - (321) _______ ________ _______ _______ ________ _______ Net return on ordinary activities before finance costs and taxation 5,007 58,068 63,075 5,060 25,046 30,106 Finance costs (627) (1,851) (2,478) (677) (1,663) (2,340) _______ _______ _______ _______ _______ _______ Net return on ordinary activities before taxation 4,380 56,217 60,597 4,383 23,383 27,766 Taxation - - - - - - _______ _______ _______ _______ _______ _______ Net return on ordinary activities after taxation 4,380 56,217 60,597 4,383 23,383 27,766 _______ _______ _______ _______ _______ _______ Return per share 13.15p 168.72p 181.87p 12.07p 64.41p 76.48p * The results for the year ended 30th June 2005 have been restated in accordance with Financial Reporting standard 21. JPMorgan Mid Cap Investment Trust plc Unaudited figures for the year ended 30th June 2006 Statement of Total Recognised Gains and losses 2006 2005 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Movement in value of cash flow hedge during the year - 356 356 - - - Return on ordinary activities 4,380 56,217 60,597 4,383 23,383 27,766 _______ ________ ________ _______ _______ ________ Total recognised gains for the year 4,380 56,573 60,953 4,383 23,383 27,766 _______ ________ ________ _______ _______ ________ JPMorgan Mid Cap Investment Trust plc Unaudited figures for the year ended 30th June 2006 Reconciliation of Movements in Shareholders' Funds Capital Called up redemption share reserve Capital Other Revenue capital £'000 reserve reserve reserve Total £'000 £'000 £'000 £'000 £'000 9,644 356 137,290 - 6,260 153,550 At 30th June 2004 (restated)* Shares bought back and cancelled (885) 885 (11,771) - - (11,771) Net return on ordinary activities - - 23,383 - 4,383 27,766 Dividends appropriated in the year - - - - (3,648) (3,648) _______ ________ ________ _______ _______ _______ At 30th June 2005 (restated)* 8,759 1,241 148,902 - 6,995 165,897 Adjustment to opening shareholders funds at 1st July 2005 to reflect the adoption of bid prices - - (659) - - (659) Adjustment to opening shareholders funds at 1st July to reflect value of cash flow hedge - - - (356) - (356) Change in fair value of cash flow - - - 356 - 356 hedge Shares bought back and cancelled (982) 982 (20,295) - - (20,295) Net return on ordinary activities - - 56,217 - 4,380 60,597 Dividends appropriated in the year - - - - (4,144) (4,144) _______ ________ ________ _______ _______ ________ At 30th June 2006 7,777 2,223 184,165 - 7,231 201,396 *The results for the year ended 30 June 2005 and 30th June 2004 have been restated in accordance with Financial Reporting Standard 21. JPMorgan Mid Cap Investment Trust plc Unaudited figures for the year ended 30th June 2006 Balance Sheet 2005 2006 (Restated)* £'000 £'000 Fixed Assets Investments at fair value through profit or loss 229,649 183,574 Net current liabilities (18,794) (6,982) Creditors: Amounts falling due after more than one year (9,459) (10,695) _______ _______ Total net assets 201,396 165,897 ===== ===== Net asset value per share 647.4p 473.5p *The results for the year ended 30th June 2005 have been restated in accordance with FRS21. Cash Flow Statement For the year ended 30th June 2006 2006 2005 £'000 £'000 Net cash inflow from operating activities 4,138 4,189 Net cash outflow from returns on investments and servicing of finance (2,559) (2,374) Net cash inflow from capital expenditure and financial investment 12,470 19,458 Dividends paid (4,144) (3,648) _______ _______ Net cash flow before financing 9,905 17,625 Financing Repurchase of shares (20,295) (11,771) Drawdown/(repayment) of short-term loans 10,500 (10,000) Part repurchase of debenture stock (1,246) (250) _______ _______ Net cash outflow from financing (11,041) (22,021) _______ _______ Decrease in cash and cash equivalents (1,136) (4,396) ===== ==== Notes 1. Accounting policies The Company has adopted certain new accounting policies following the issue of new financial reporting standards (FRSs) and the issue of the revised Statement of Recommended Practice 'Financial statements of investment trust companies' by the AITC in December 2005. The material changes to the accounts are as follows: 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, however, in accordance with the exemption conferred by paragraph 108D of FRS26, comparatives have not been restated. In prior years, listed investments were valued using last trade prices. The adoption of bid prices on 1st July 2005 decreased the value of investments by £659,000. In accordance with FRS21 'Events after the Balance Sheet date', final dividends declared but not approved are not accrued in the accounts, since their payment only becomes certain once shareholder approval has been obtained. Comparative figures have been restated and this has led to an increase in net assets of £2,908,000 at 30th June 2005. In accordance with FRS 26 'Financial instruments; Measurement' interest rate swaps are now valued at fair value in the balance sheet. This represents a change in accounting policy, however in accordance with the exemption conferred by paragraph 108D of FRS 26, comparatives have not been restated. This change in policy results in a reduction in opening net assets on 1st July 2005 of £356,000. Gains or losses arising in the fair value of the cash flow hedges in the form of interest rate swaps are taken directly to the Reconciliation of Movements in Shareholders' Funds. Such gains or losses are taken to a reserve created specifically for that purpose. During the year to 30th June 2006, the fair value of the swaps increased by £356,000. 2. Dividends 2006 2005 £'000 £'000 Final dividend of 8.3p (2004; 7.0p) 2,861* 2,571 Interim of 4.0p (2005: 3.0p) 1,283 1,077 ---------- ---------- Total dividends paid in the year 4,144 3,648 ===== ===== Final dividend payable of 8.5p (2005: 8.3p) 2,644 2,861* *The Company declared a dividend of £2,908,000 but the dividend paid amounted to £2,861,000 as a result of share buybacks. The final dividend has been proposed in respect of the year ended 30th June 2006 and is subject to approval at the Annual General Meeting. In accordance with the revised accounting policy of the Company, this dividend will be reflected in the accounts for the year ended 30th June 2007. 3. Comparative figures The above financial information does not constitute statutory accounts as defined in Section 240 of the Companies Act 1985. The comparative financial information is an extract from the statutory accounts for the year ended 30th June 2005 (as restated). Those accounts, upon which the auditors issued an unqualified opinion, have been delivered to the Registrar of Companies. JPMORGAN ASSET MANAGEMENT (UK) LIMITED This information is provided by RNS The company news service from the London Stock Exchange

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