Final Results

JPMorgan Fleming Smaller Cos IT PLC 21 October 2005 STOCK EXCHANGE ANNOUNCEMENT JPMORGAN FLEMING SMALLER COMPANIES INVESTMENT TRUST PLC PRELIMINARY ANNOUNCEMENT OF ANNUAL RESULTS The Directors of JPMorgan Fleming Smaller Companies Investment Trust plc announce the Company's preliminary results for the year ended 31st July 2005. Investment Performance I am pleased to be able to report that, for the third year in a row, the Company has produced a strong set of results with continued outperformance of its benchmark index. Over the year to 31st July 2005 the Company produced a total return on net assets of 37.6% compared with the total return of our benchmark, the FTSE Small Cap Index (excluding investment trusts) of 21.8%. The return to shareholders was better still at 42.2% as the discount narrowed from 20.2% to 17.8%. Since the year end, performance has remained strong with the Company continuing to outperform the benchmark index. As at 14th October 2005 the net asset value per share was 404.96p, the share price 353.75p and the discount 12.64%. Revenue and Dividends Net revenue after taxation for the year was £903,000 (2004: £966,000) and earnings per share, calculated on the average number of shares in issue, were 3.62p (2004: 3.80p). The Directors are recommending a final dividend of 3.75p per share (2004: 3.75p) in line with last year, resulting in a transfer of £5,000 (2004: £13,000) to revenue reserves. If approved, the dividend will be paid on 15th December 2005 to shareholders on the register on 28th October 2005. Each year the level of income received varies according to the Company's gearing, its investment stance and market conditions and, whilst it is the Company's policy to distribute substantially all the available income each year, shareholders should note that the Company's dividends will vary accordingly. Continuation Vote The Company's Articles of Association require that shareholders vote on the continuation of the Company at every third Annual General Meeting. The fourth of these votes falls this year. The Board has evaluated the performance and progress of the Company over the last year and, in particular, the three years since the last continuation vote was passed. The table below shows that the Company has consistently outperformed over these periods, and was ranked 6 out of 21 funds in the UK Smaller Companies Funds Sector as measured by the Association of Investment Trust Companies (AITC) since July 2002. 1st August 2004 1st August 2002 to 31st July 2005 to 31st July 2005 Net asset value - total return +37.6% +96.8% Benchmark - total return +21.8% +55.6% Share price - total return +42.2% +106.2% In the period since the last continuation vote the net asset value outperformance each year against the benchmark has been as follows:- 1st August to 31st July 2002 - 2003 +7.4% 2003 - 2004 +5.7% 2004 - 2005 +15.8% The Directors have confidence in the long-term growth prospects for UK smaller companies and in the ability of the Managers to take advantage of this potential. They therefore recommend that shareholders vote in favour of the resolution at the Annual General Meeting on 28th November 2005, as they intend to do so in respect of their own holdings. Investment Manager The Company's objective is to provide shareholders with capital growth from a portfolio of investments in UK smaller companies. Your Board has once again thoroughly reviewed the capabilities of the Investment Manager in order to assess whether JPMorgan Asset Management (UK) Limited remains the most appropriate manager of the Company's assets. We have concluded that the ongoing appointment of the existing Investment Manager is in the best interests of shareholders. 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. Over the course of the year the Company repurchased a total of 1,470,000 shares, representing 5.8% of the issued share capital, adding 1.3% to the net asset value per share. Since 31st July 2005 the Company has repurchased a further 470,000 shares representing 2.0% of the issued share capital. This process has added 0.3% 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. Board of Directors Richard Oldfield resigned as a Director on 4th April 2005. I would like to thank him for his contribution over the six years he was a member of the Board. Following Richard Oldfield's retirement, the Board undertook an extensive search for replacements. As a result of this exercise, a number of suitable candidates were identified and Mr Ivo Coulson, Director of UK Equities at Tiburon Partners and Mr Michael Quicke, formerly Chief Executive of Leopold Joseph Holdings Plc were appointed as Directors on 18th October 2005. I am confident that both will make significant contributions to the Board's future deliberations. During the year, the Board carried out an evaluation of the Directors, the Chairman, the Board itself and its Committees. In accordance with the Company's Articles of Association, the Director retiring by rotation at this year's Annual General Meeting is Richard Fitzalan Howard. Richard has a wealth of experience in the fund management industry and I have no hesitation in recommending his re-election. In addition, having served as a Director for more than nine years, I am also standing for re-election. The Board does not believe that length of service in itself should disqualify a Director from seeking re-election and, in proposing my re-election, it has taken into account the ongoing requirements of the Combined Code, including the need to refresh the Board and its Committees. In accordance with the Company's Articles of Association both Mr Ivo Coulson and Mr Michael Quicke will stand for election at the forthcoming Annual General Meeting. Annual General Meeting This year's Annual General Meeting will be held on 28th November 2005 at 3.30 pm at The City Conference Centre, 80 Coleman Street, London EC2R 5BJ. Strone Macpherson Chairman 21st October 2005 For further information, please contact: Andrew Norman For and on behalf of JPMorgan Asset Management (UK) Limited - Secretary 020 7742 6000 JPMorgan Fleming Smaller Companies Investment Trust plc Unaudited figures for the year ended 31 July 2005 Statement of Total Return Year ended 31 July 2005 Year ended 31 July 2004 Unaudited Audited Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Realised gains on investments - 3,227 3,227 - 1,923 1,923 Unrealised gains on investments - 22,394 22,394 - 8,931 8,931 Other capital charges - (12) (12) - (15) (15) Income from investments 1,722 - 1,722 1,768 - 1,768 Other income 28 - 28 22 - 22 _______ ________ _______ _______ _______ _______ Gross return 1,750 25,609 27,359 1,790 10,839 12,629 Management fee (424) (424) (848) (368) (368) (736) Other administrative expenses (243) - (243) (282) - (282) Interest payable (180) (180) (360) (174) (174) (348) _______ _______ _______ _______ _______ _______ Net return before taxation 903 25,005 25,908 966 10,297 11,263 Taxation - - - - - - _______ _______ _______ _______ _______ _______ Total return attributable to ordinary 903 25,005 25,908 966 10,297 11,263 shareholders Dividends payable (898) - (898) (953) - (953) _______ _______ _______ _______ _______ _______ Transfer to reserves 5 25,005 25,010 13 10,297 10,310 _______ _______ _______ _______ _______ _______ Return per ordinary share 3.62p 100.41p 104.03p 3.80p 40.51p 44.31p JPMorgan Fleming Smaller Companies Investment Trust plc Unaudited figures for the year ended 31 July 2005 BALANCE SHEET 31 July 31 July 2005 2004 Unaudited Audited £'000 £'000 Investments at valuation 100,882 78,470 Net current (liabilities)/assets (7,027) 394 Amounts falling due after more than one year - (5,600) _______ _______ Total net assets 93,855 73,264 ======= --===== _______ _______ Ordinary shareholders' funds 93,855 73,264 ======= --===== Net asset value per ordinary share 391.9p 288.3p CASH FLOW STATEMENT Year ended 31 Year ended 31 July July 2005 2004 Unaudited Audited £'000 £'000 Net cash inflow from operating activities 719 801 Net cash outflow from servicing of finance (392) (333) Net cash inflow from capital expenditure and financial investment 3,102 3,840 Dividends paid (953) (724) Net cash outflow from financing (4,099) (2,594) _______ ______ (Decrease)/increase in cash for the period (1,623) 990 ======= --===== The above financial information does not constitute statutory accounts for the years ended 31 July 2005 or 2004. The financial information for the year ended 31 July 2004 is derived from the statutory accounts for that year that have been delivered to the Registrars of Companies. The auditors reported on those accounts; their report was unqualified and did not contain a statement under s237(2) or (3) Companies Act 1985. The statutory accounts for the year ended 31 July 2005 will be finalised on the basis of the financial information presented by the directors in this preliminary announcement and will be delivered to the Registrar of Companies following the company's annual general meeting. JPMORGAN ASSET MANAGEMENT (UK) LIMITED 21st October 2005 This information is provided by RNS The company news service from the London Stock Exchange

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