Final Results

RNS Number : 4544C

JPMorgan Smaller Cos IT PLC

15 October 2015

 

LONDON STOCK EXCHANGE ANNOUNCEMENT

JPMORGAN SMALLER COMPANIES INVESTMENT TRUST PLC

FINAL RESULTS FOR THE YEAR ENDED
31ST JULY 2015

The Directors of JPMorgan Smaller Companies Investment Trust plc announce the Company's results for the year ended 31st July 2015.

Chairman's Statement

Investment Performance

This is our first report to you following the bonus issue of Subscription shares in February, and when referring to your Company's progress, we will provide performance statistics both before and after the diluting effect of the one for five bonus issue of Subscription shares.

Your Company performed well during the year to 31st July 2015, despite periods of considerable volatility in stock markets. The total return on net assets before dilution was +15.7% (+13.4% after dilution), which compares with +10.5% for the benchmark index. The return to Ordinary shareholders was +14.6% reflecting a slight narrowing of the share price discount to diluted net asset value from 17.8% to 17.0%.

This year's results add to the Company's long-term track record, and the table below sets out the outperformance achieved over the last ten years. The Board is confident that our emphasis on strong, quality growing smaller companies will continue to deliver good returns, and serve shareholders well in the years to come.

Since the year end, smaller company shares have continued their positive run, with the net asset value per share (before dilution) increasing 1.3% to 1,052.7p, and the share price 6.7% to 901p at 13th October 2015. By comparison, the Company's benchmark has fallen 0.05%. The current level of discount is 14.4%.

In their report, the Investment Managers have provided further detail on portfolio performance and attribution, together with a commentary on markets.

Revenue and Dividends

Net revenue after taxation for the year was £2,168,000 (2014: £1,824,000) and revenue return per share, calculated on the average number of shares in issue, was 12.20p (2014: 10.01p). The Directors are recommending a final dividend of 11.0p per share (2014: 9.60p), costing £1,901,000 (2014: £1,747,000). If approved, the dividend will be paid on 18th December 2015 to shareholders on the register at close of business on 13th November 2015.

The level of income received each year varies according to the Company's gearing, its investment stance and economic conditions. It is the Company's policy to distribute substantially all the available income each year, and shareholders should note that the Company's dividends may vary accordingly.

Gearing

Gearing is regularly discussed between the Board and the Investment Managers. A borrowing facility of £24 million with Scotiabank is in place until April 2016. This is highly flexible and is used with the aim of enhancing long-term returns. There is a further option to increase borrowings to £34 million subject to certain conditions. At the year end, £19 million was drawn on the facility representing a gearing level of 8.4% of net assets.

Share Repurchases and Issuance

At last year's Annual General Meeting, shareholders granted the Directors authority to repurchase the Company's shares for cancellation. During the financial year the Company repurchased a total of 919,007 Ordinary shares for a total consideration of £7,053,000, representing 5.1% of the issued Ordinary share capital at the beginning of the year.

The Board's objective remains to use this authority to manage imbalances between the supply and demand of the Company's shares, with the intention of reducing the volatility of the discount. To date the Board believes this mechanism has been helpful and therefore proposes and recommends that powers to repurchase up to 14.99% of the Company's shares for cancellation be renewed.

During the year, 5,990 Ordinary shares were issued upon exercise of Subscription shares. A decision to convert Subscription shares should only be made after careful consideration of the prevailing market price of the Ordinary shares, particularly if they are trading below the exercise price of 915 pence. At the year end there were 3,561,542 Subscription shares in issue. Details of how to exercise the Subscription shares are given on page 64 of the 2015 Annual Report and Accounts.

Board of Directors

As noted in my half-year report, the Board appointed Andrew Impey as a non-executive director in March. As part of the Board's long-term succession planning, we have temporarily increased the total number of Directors. This will be reversed in due course on future retirements.

Directors' fees will not be increased this year, but to accommodate the temporary increase in Board size and any future increases in fees, the Directors recommend that, in accordance with Article 97 of the Company's Articles of Association, the permitted maximum aggregate of Directors' fees payable be increased from £150,000 to £200,000 per annum at the forthcoming Annual General Meeting.

Corporate Governance

In accordance with corporate governance best practice, all Directors will retire and seek reappointment or appointment at this year's Annual General Meeting. Shareholders who wish to contact the Chairman or other members of the Board directly may do so through the Company Secretary or the Company's website.

Annual General Meeting ('AGM')

The Company's twenty fifth AGM will be held on Monday, 23rd November 2015 at 3.00 p.m. at 60 Victoria Embankment, London EC4Y 0JP. 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. Shareholders who are unable to attend the AGM in person are encouraged to use their proxy votes.

Outlook

There are a wide range of economic and political uncertainties that continue to worry markets. Internationally, these include the timing and pace of US interest rate increases, the slowdown of the Chinese economy and political deadlock in Europe. Domestically, the outcome of the forthcoming EU referendum is uncomfortably uncertain.

However, against this background, the UK economy is making good progress. For the time being, domestic politics provide a reasonable environment for smaller companies to prosper, although after a long period of stability, we expect wage inflation to become a greater concern in the future.

A good flow of companies coming to the market is providing our managers with new opportunities, and the recent increase in merger and acquisition activity reinforces our view that smaller companies currently represent relatively good value. This supports the Board's confidence that the Company is well placed to deliver good performance over the longer term.

Michael Quicke OBE

Chairman

15th October 2015

Investment Managers' Report

Performance and Market Background

After a fairly flat first half, your Company enjoyed strong performance over the year to July 2015. The benchmark index, the FTSE Small Cap Index excluding investment trusts, produced a total return of 10.5% for the 12 months, but your Company outperformed this, providing an undiluted total return on net assets of 15.7%. On a fully diluted basis, which takes into account the Subscription shares in issue, and the minimal movement in the discount since July 2014, the 'unit' share price (ie the share price return of both the Ordinary shares and the Subscription shares) also produced a total return for the year of 15.7%.

While the year contained periods of significant volatility, stock markets continued to rise in the more domestically-focussed mid and smaller sized companies. This outperformance of mid and small companies was aided by the on-going mergers and acquisitions (or 'M&A') activity that we have been predicting for some time. The run up to the General Election in May 2015 caused some nervousness in markets, but the outcome was a generally positive one for your Company, providing the certainty of a pro-business Government for the next five years.

Portfolio

Both sector and stock selection were positive over the year. Two key sector contributors were our overweight position in Financial Services (OneSavings Bank and Mortgage Advice Bureau, among others) and in the Beverage sector where we benefitted from our large position in Fevertree Drinks, an IPO during the year. We also continued to benefit from our significant underweight position in the Mining sector. In terms of stocks, several of our long term holdings again delivered very strong returns; notable among these were 4Imprint, Staffline and Telit Communications. While there were inevitable disappointments during the year, the key one was our holding in Trinity Mirror. We have retained our holding in the company, as we believe the price decline to be overdone and the shares to be very under-valued.

We have discussed for some time our view that M&A was likely to be a significant feature in smaller companies, and this year bore out our thesis. Most notable for your Company were the bids for Quintain Estates, a large and long-held position in the portfolio, and HellermannTyton, a company which we have held since it floated in 2013. We expect to see more of this in the coming year. Conversely, we have also seen a large influx of new companies floating in the small cap arena. We have invested in a significant number of these exciting new opportunities, including FDM and Kainos in the technology space, Wizz Air (ultra low cost airline), and a second challenger bank, Aldermore, to sit alongside our holding in OneSavings Bank. We have been pleased to see these new growth companies coming to the market, and to date have benefitted significantly from these investments.

Due in part to these new holdings in the portfolio, we have further increased our domestic focus within the fund, in order that our investments may continue to benefit from the strength of the UK economy and the UK consumer. This can be seen from the significant overweight positions we hold in General Retailers, in Financial Services and Banks, and in our Media overweight.

Outlook

The backdrop to our investments is generally positive. Both the US and the UK continue to grow, with the UK currently enjoying 2.6% GDP growth year-on-year. Inflation remains very low, benefiting from the on-going low oil price, the recent fall in commodity prices, and declining food prices. In addition, wage increases are occurring well ahead of inflation; real wages are now predicted to rise by 3.5% this year, unemployment is down to 5.6% and we have now seen 20 consecutive months of year-on-year increase in consumer spending power. Unsurprisingly, this has led to UK consumer confidence being at a 15 year high.

In Europe, a key trading partner for the UK, Greece has secured a bailout extension with its creditors, and new data points from the Eurozone on business and consumer confidence demonstrate that the recent Greek crisis caused little damage to the broader Eurozone countries. We also expect the European economies to continue to benefit from the on-going stimulus plan. Stock market concerns have now focused on China, but it is our view that the perceived risks from recent Chinese stock market turbulence are being over-played. The Chinese economy has clearly slowed from the heady days of 8% GDP growth per annum, but this slowdown is well-known and is also less relevant for smaller companies.

There are three relevant risks on the horizon; the EU Referendum, interest rate rises in the US and UK and the increase in the National Living Wage. On the former, current surveys appear to show little risk of the UK leaving the EU. Regarding rate rises, it remains our view that any rises in interest rates (possibly in the second quarter of 2016 in the UK) will be small and controlled, and reflect the improving health of both the US and UK economies. More recently, post the Summer Budget, the Chancellor's significant increases in the minimum wage - the National Living Wage - have already started to have an impact. It is currently our view that the beneficial impact on the consumer, as wages rise, should approximately balance out the cost to certain companies of significant wage increases, but we are keeping a weather eye on the outcome of this policy change.

Overall, we believe that smaller companies will remain strong beneficiaries of the on-going economic recovery. While bouts of stock market volatility have become the norm, we continue to use them to add to our favoured holdings, and we continue to believe that the domestic bias of the majority of our holdings shelters them from many global concerns. Valuations remain extremely attractive in smaller companies, as evidenced by the wave of M&A we have seen. This, plus the increasing number of exciting new growth companies that we have seen coming to the market, provides us with confidence for the year ahead.

Georgina Brittain

Katen Patel

Investment Managers

15th October 2015

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 remain unchanged since last year and 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 on. 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 Managers, who attend all Board meetings, and reviews data which shows 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 usually holds a separate meeting devoted to strategy each year.

•     Discount: A disproportionate widening of the discount relative to the Company's peers could result in loss of value for shareholders. The Board regularly discusses discount policy and has set parameters for the Manager and the Company's broker to follow.

•     Smaller company Investment: Investing in smaller companies is inherently more risky and volatile, partly due to lack of liquidity in some shares, plus AIM stocks are less regulated. The Board discusses these risk factors regularly at each Board meeting with the Investment Managers. The Board has placed investment restrictions and guidelines to limit these risks.

•     Regulatory: Changes in financial or tax legislation, including in the European Union, may adversely affect the Company. The Manager makes recommendations to the Board on accounting, dividend and tax policies, and seeks external advice where appropriate.

•     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 25 to 30 of the 2015 Annual Report and Accounts. The Board receives regular reports from the Manager and the Company's broker about shareholder communications, their views and their activity.

•     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 implication 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 Income and Corporation Tax Act 2010 ('Section 1158'). Details of the Company's approval are given under 'Business of the Company' above. Should the Company breach Section 1158, it may lose its investment trust status and as a consequence capital gains within the Company's portfolio would 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, as its shares are listed on the London Stock Exchange, the UKLA Listing Rules and Disclosure and Transparency Rules ('DTRs'). 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 or DTRs may 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, JPMorgan Funds Limited, and its professional advisers to monitor compliance with all relevant requirements.

•     Operational: Disruption to, or failure of, the Manager's accounting, dealing or payments systems or the depositary's or custodian's records may prevent accurate reporting and monitoring of the Company's financial position. On 1st July 2014, the Company appointed BNY Mellon Trust & Depositary (UK) Limited to act as the depositary, responsible for overseeing the operations of the custodian, JPMorgan Chase Bank, N.A., and the Company's cash flows. Details of how the Board monitors the services provided by the Manager, its associates and depositary and the key elements designed to provide effective internal control are included within the Risk Management and Internal Control section of the Corporate Governance report on pages 28 and 29 of the 2015 Annual Report and Accounts. 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 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 networks and security of its trading applications are tested by Deloitte and reported every six months against the AAF 01/06 standard.

•     Financial: The financial risks faced by the Company include market price risk, interest rate risk, liquidity risk and credit risk. Counterparties are subject to daily credit analysis by the Manager and regular consideration at meetings of the Board. In addition the Board receives reports on the Manager's monitoring and mitigation of credit risks on share transactions carried out by the Company. Further details are disclosed in note 22 on pages 58 and 59 of the 2015 Annual Report and Accounts

Related Parties 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 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.

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.jpmsmallercompanies.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 auditor 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 2015 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

Michael Quicke OBE

Chairman

15th October 2015

Financial Statements

Income Statement

for the year ended 31st July 2015

		2015			2014
		Revenue	Capital	Total	Revenue	Capital	Total
		£'000	£'000	£'000	£'000	£'000	£'000
Gains on investments held at fair   value through profit or loss		-	22,012	22,012	-	12,074	12,074
Net foreign currency gains/(losses)		-	13	13	-	(1)	(1)
Income from investments		3,604	-	3,604	3,126	-	3,126
Other interest receivable and similar   income		2	-	2	25	-	25
Gross return		3,606	22,025	25,631	3,151	12,073	15,224
Management fee		(733)	(733)	(1,466)	(743)	(743)	(1,486)
Other administrative expenses		(486)	-	(486)	(413)	-	(413)
Net return on ordinary activities   before finance costs and taxation		2,387	21,292	23,679	1,995	11,330	13,325
Finance costs		(140)	(140)	(280)	(137)	(137)	(274)
Net return on ordinary activities   before taxation		2,247	21,152	23,399	1,858	11,193	13,051
Taxation		(79)	-	(79)	(34)	-	(34)
Net return on ordinary activities   after taxation		2,168	21,152	23,320	1,824	11,193	13,017
Return per Ordinary share - undiluted (note 3)		12.20p	119.02p	131.22p	10.01p	61.44p	71.45p
Return per Ordinary share - diluted1 (note 3)		12.20p	119.02p	131.22p	-	-	-

¹The Subscription shares have no dilutive effect as the conversion price for these shares exceeded the average market price of the Ordinary shares from the date of issue to 31st July 2015.

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

for the year ended 31st July 2015

	Called up		Capital
	share	Share	redemption	Capital	Revenue
	capital	premium	reserve	reserves	reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000
At 31st July 2013	4,555	18,360	2,111	126,167	2,923	154,116
Repurchase and cancellation of the   Company's own shares	(6)	-	6	(173)	-	(173)
Net return on ordinary activities	-	-	-	11,193	1,824	13,017
Dividend appropriated in the year	-	-	-	-	(1,731)	(1,731)
At 31st July 2014	4,549	18,360	2,117	137,187	3,016	165,229
Repurchase and cancellation of the   Company's own shares	(230)	-	230	(7,053)	-	(7,053)
Bonus Issue of Subscription shares	4	(4)	-	-	-	-
Issue of Ordinary shares on exercise   of Subscription shares	1	54	-	-	-	55
Subscription share issue costs	-	(220)	-	-	-	(220)
Net return on ordinary activities	-	-	-	21,152	2,168	23,320
Dividend appropriated in the year	-	-	-	-	(1,734)	(1,734)
At 31st July 2015	4,324	18,190	2,347	151,286	3,450	179,597

Balance Sheet

at 31st July 2015

		2015	2014
		£'000	£'000
Fixed assets
Investments held at fair value through profit or loss		196,292	181,571
Investment in liquidity fund held at fair value through profit or loss		2,539	3,050
		198,831	184,621
Current assets
Debtors		231	482
Cash and short term deposits		1,293	564
		1,524	1,046
Creditors: amounts falling due within one year		(20,758)	(1,438)
Net current liabilities		(19,234)	(392)
Total assets less current liabilities		179,597	184,229
Creditors: amounts falling due after more than one year		-	(19,000)
Net assets		179,597	165,229
Capital and reserves
Called up share capital		4,324	4,549
Share premium		18,190	18,360
Capital redemption reserve		2,347	2,117
Capital reserves		151,286	137,187
Revenue reserve		3,450	3,016
Total equity shareholders' funds		179,597	165,229
Net asset value per Ordinary share - undiluted (note 4)		1,039.1p	908.0p
Net asset value per Ordinary share - diluted1 (note 4)		1,017.9p	-

¹The 31st July 2015 dilution has been calculated using the new Subscription shares issued on 25th February 2015.

The Company is registered in England and Wales No. 2515996.

Cash Flow Statement

for the year ended 31st July 2015

		2015	2014
		£'000	£'000
Net cash inflow from operating activities		1,216	1,070
Returns on investments and servicing of finance
Interest paid		(279)	(258)
Net cash outflow from returns on investments and servicing of finance		(279)	(258)
Taxation recovered		-	17
Capital expenditure and financial investment
Purchases of investments		(91,356)	(132,280)
Sales of investments		100,274	129,434
Other capital charges		(14)	(15)
Net cash inflow/(outflow) from capital expenditure and   financial investment		8,904	(2,861)
Dividends paid		(1,734)	(1,731)
Net cash inflow/(outflow) before financing		8,107	(3,763)
Financing
Net drawdown of loans		-	4,000
Subscription share issue costs		(220)	-
Issue of Ordinary shares on exercise of Subscription shares		55	-
Repurchase and cancellation of the Company's own shares		(7,226)	-
Net cash (outflow)/inflow from financing		(7,391)	4,000
Increase in cash and cash equivalents		716	237

Notes to the Financial Statements

for the year ended 31st July 2015

1.    Accounting policies

      Basis of accounting

The financial statements 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 AIC in January 2009.

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

The financial statements have been prepared on a going concern basis. The disclosures on going concern in the Directors' Report on pages 23 and 24 of the 2015 Annual Report and Accounts form part of these accounts.

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

2.   Dividends

      Dividends paid and proposed

	2015	2014
	£'000	£'000
2014 final dividend of 9.6p (2013: 9.5p)	1,734	1,731
Total dividends paid in the year	1,734	1,731
Final dividend proposed of 11.0p (2014: 9.6p)	1,901	1,747

For the year ended 31st July 2014, the Company declared a dividend of £1,747,000 but the final dividend paid amounted to £1,734,000 due to share buybacks after the balance sheet date but prior to the share register record date.

The final dividend has been proposed in respect of the year ended 31st July 2015 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 accounts for the year ending 31st July 2016.

3.   Return per share

	2015	2014
	£'000	£'000
Revenue return	2,168	1,824
Capital return	21,152	11,193
Total return	23,320	13,017
Weighted average number of Ordinary shares in issue during the year used for   the purpose of the undiluted calculation	17,772,488	18,219,309
Weighted average number of Ordinary shares in issue during the year used for   the purpose of the diluted calculation	17,772,488	-
Undiluted
Revenue return per share	12.20p	10.01p
Capital return per share	119.02p	61.44p
Total Return per share	131.22p	71.45p
Diluted1
Revenue return per share	12.20p	-
Capital return per share	119.02p	-
Total return per share	131.22p	-

¹The 31st July 2015 dilution has been calculated using the new Subscription shares issued on 25th February 2015. However, there is no dilutive effect as the conversion price for these shares exceeded the average market price of the Ordinary shares from the date of issue to 31st July 2015.

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

	2015	2014
	£'000	£'000
Undiluted
Ordinary shareholders funds (£'000)	179,597	165,229
Number of Ordinary shares in issue	17,283,355	18,196,372
Net asset value per Ordinary share (pence)	1,039.1	908.0
Diluted1
Ordinary shareholders funds assuming exercise of Subscription shares (£'000)	212,184	-
Number of potential Ordinary shares in issue	20,844,807	-
Net asset value per Ordinary share (pence)	1,017.9	-

¹The 31st July 2015 dilution has been calculated using the new Subscription shares issued on 25th February 2015.

Status of results announcement

2014 Financial Information

The figures and financial information for 2014 are extracted from the Annual Report and Accounts for the year ended 31st July 2014 and do not constitute the statutory accounts for the year. The Annual Report and Accounts includes 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 Registrar of Companies in due course.

2015 Financial Information

The figures and financial information for 2015 are extracted from the Annual Report and Accounts for the year ended 31st July 2015 and do not constitute the statutory accounts for the year. The Annual Report and Accounts includes 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 Registrar 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 ASSET MANAGEMENT

15th October 2015

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 is also available on the Company's website at www.jpmsmallercompanies.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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