Final Results

RNS Number : 8314C

JPMorgan US Smaller Co. IT

20 March 2014

 



LONDON STOCK EXCHANGE ANNOUNCEMENT

JPMORGAN US SMALLER COMPANIES INVESTMENT TRUST PLC

FINAL RESULTS FOR THE YEAR ENDED
31ST DECEMBER 2013

Chairman's Statement

Performance

It is an easy job to write this year's Chairman's Statement following such exceptional results, both in terms of increase in the Company's net assets and rise in share price. Our net assets rose by 38.7% during 2013, comfortably ahead of the Russell 2000 which increased by 35.9% (in sterling terms). Our assets have now risen by some 171% over the past five years compared with a rise of some 114% for the Russell 2000 over the same period.

This outstanding performance by our Investment Manager has helped support strong demand for our shares and the share price gained 58.6% in 2013, with the result our shares moved from standing at a discount to net asset value (NAV) at the end of 2012 to a small premium at the end of 2013.

Discount and Premium

The Company's share price in relation to its net asset value is monitored by the Board and our professional advisors on a daily basis. US smaller companies are notoriously volatile and the shares, which towards the end of 2013 were standing above NAV, could swiftly move back onto a discount. It is important, therefore, that we renew our authority to repurchase up to 14.99% of the Company's issued share capital to allow the Board to be responsive to these events. I am pleased to say we have not had to resort to using this authority during 2013. The year marked a significant turning point in our fortunes and there has been strong demand for the shares. Since July 2013 the shares have stood at a premium to NAV and the Company has issued shares to meet this demand, in some cases from new shareholders.

Given the volatile nature of US smaller companies, together with market timing issues (US markets are trading five hours behind London) and the US dollar fluctuating against sterling, managing a tight discount policy on a daily basis is almost impossible. However, as mentioned earlier, the Board recognises that it remains a very important issue and continue to monitor it closely and will try to exercise its best judgement in response to events.

General Meeting

In the face of the continuing demand for the Company's shares and having regard to the benefits of enlarging the Company, the Board needs authority to issue shares to meet this demand. Given that the Company's existing 10% share issue authority approved at the Annual General Meeting in April 2013 was nearly exhausted, the Directors resolved to convene a General Meeting on 4th March 2014 to renew the allotment authorities. At this meeting shareholders authorised Directors to issue up to approximately 20% of the Company's issued share capital, for cash on a non-pre-emptive basis. The Directors intend to use this authority when they consider that it is in the best interests of Shareholders to do so and to satisfy continuing demand for the Company's shares. Any shares will be issued only pursuant to these authorities at prices greater than the prevailing Net Asset Value per share and therefore will be accretive to the Net Asset Value per share.

In addition, at the beginning of 2014, the Board proposed a Share Split which would reduce the Company's share price to a level where smaller sized dealings in the shares would be more efficient, hence increasing the attractiveness of the shares to potential buyers. At the General Meeting, shareholders approved a resolution to sub-divide each Existing Share into 10 new shares. Shareholders should note that this share split does not affect shareholders' proportionate interest. Also, the rights attaching to the new shares are the same as those attaching to the existing shares including, without limitation, the same voting, dividend and other rights. The new shares were admitted to the Official List of the UK Listing Authority and to trading on the main market for listed securities of the London Stock Exchange on 6th March 2014.

Revenue and Dividend

The revenue for the year, after taxation, was £526,000 (2012: £653,000). The revenue return per share, calculated on the average number of shares in issue, was 10.04 pence (2012: 12.64 pence). Since the change in the Articles at last year's Annual General Meeting, the Company can now distribute its net income despite its revenue reserve deficit. The Board is therefore recommending a dividend of 0.7 pence per share in respect of the financial year ended 31st December 2013 (7.0 pence based on the number of shares in issue as at the year end, prior to the subdivision of shares on 6th March 2014) given the Company's return on its Revenue Account. Subject to shareholders' approval at the AGM, this dividend will be paid on 6th May 2014 to ordinary shareholders on the register at the close of business on 11th April 2014.

Shareholders should note that the Company's objective remains that of capital growth and dividends will be the outcome of that policy and therefore likely to vary from year to year.

Gearing

In April 2013 our revolving credit facility with Scotiabank was renewed and increased to US$15 million to reflect the increase in our assets. Throughout the year and at the year end only US$10 million was drawn on the credit facility, as at 31st December 2013 the portfolio was 5.4% geared. The facility matures on 8th April 2014 at which point the Board will consider another gearing facility.

Currency hedging

Each day our US dollar denominated portfolio is converted into sterling for calculating the NAV which exposes the Company's assets to fluctuations in the US dollar/sterling exchange rate. The Board has the authority to reduce or eliminate the exposure to fluctuating currencies through the use of currency hedging. We review our policy on currency hedging regularly but to date we have not carried out any hedging and have no plans to do so in the immediate future.

Alternative Investment Fund Managers' Directive (AIFMD)

The final regulations for the AIFMD have been published and we are moving towards compliance with the new rules. We expect to enter into arrangements with our Manager, JPMorgan Asset Management, shortly such that it will act as our Alternative Investment Fund Manager at no additional cost. The process of appointing a Depositary, as required by the Directive, is also underway. Further announcements will be made in due course.

Revised Reporting Requirements

Shareholders will note that there have been a number of changes in reporting requirements which are reflected in this year's Annual Report. In particular, there has been the addition of a Strategic Report, which is designed to replace and enhance reporting previously included in the Business Review section of the Directors' Report and includes the Chairman's Statement. There have also been consequential changes in the contents of the remainder of the Report and changes to the structure and voting in respect of the Directors' Remuneration Report.

Annual General Meeting

We are holding our AGM at Holborn Bars, 138-142 Holborn, London EC1N 2NQ on Tuesday, 29th April 2014 at 2.30 p.m. As in previous years, there will be a presentation by one of the investment management team which will cover a review of 2013 as well as the outlook for the current year. Following the meeting some refreshments will be served which will provide shareholders with the opportunity to meet the Directors and the representatives from JPMAM and ask any questions on the portfolio and performance.

If you have any detailed or technical questions, it would be helpful if you could raise them in advance of the meeting by writing to the Company Secretary at Finsbury Dials, 20 Finsbury Street, London EC2Y 9AQ. Shareholders that hold their shares through CREST are reminded that they are able to lodge their proxy votes electronically.

Outlook

After such a strong year for US equities some consolidation is to be expected. However, with US economic activity steadily improving, the background for smaller companies, particularly those with a domestic bias which are well represented in the portfolio, is better than it has been for a number of years. While valuations are more demanding than twelve months ago, longer term growth prospects for smaller companies still look promising. Should market setbacks occur, we believe that the disciplined investment process operated by Don Jose and his team will provide a level of protection to the portfolio. Longer term, the US economy has demonstrated its ability to create exciting growth prospects in the small cap sector and we believe that our company can continue to take advantage of these opportunities.

Davina Walter

Chairman

20th March 2014

Investment Manager's Report

Market Review

During 2013 the Russell 2000 Index rose very strongly as investors were coaxed back into the market by low interest rates, manageable inflation levels and a modestly improving economic environment. As the year unfolded, investors' risk appetites were spurred on by low levels of volatility and a lack of investment alternatives. Investors waded back into the market, embracing risk in general, particularly in small cap stocks. In fact, 2013 was the fourth largest annual gain ever in the Russell 2000, and continued a string of double-digit increases in four of the past five years. The primary driver of the Russell 2000 gains last year was multiple expansion, as the Russell 2000's P/E multiple increased from around 15x at the start of the year to about 19.5x by year end, while profit growth was not particularly robust. The year end multiple on forward earnings is approximately one standard deviation above normal and suggests that investors' fears about the Great Recession have greatly subsided.

Clearly, equities are not the bargain they were in 2009 and the easy money has been made. That said, while valuations appear fair to slightly elevated at current levels, the risk-reward still seems preferable to other asset classes. Yields on the 10-year Treasury are hovering around 2.8%, which is up 100bps from this time last year, but still pales in comparison to the earnings yield on the Russell of 5.1%. During 2013, investors, who were overweight cash and fixed income assets, appeared to be re-risking their portfolios at the margins, anxious to participate in potential future upside in equities. As investors reduced their fixed income exposure and charged into equities, we witnessed an underlying bid to stocks, which has kept pullbacks relatively short and shallow and suggests that the path of least resistance for stocks continues to be higher, despite rising valuations.

Investment Performance

For the year to 31st December 2013, the total return on net assets was 38.7%, which compares with a rise of 35.9% in our benchmark, the Russell 2000 index, in sterling terms. The Company's outperformance was driven by strong stock selection and sector allocation. Stock selection was strongest in Financials, Technology and Consumer Discretionary, offset by underperformance in Producer Durables and Healthcare.

2013 was another challenging year for small cap investors, with only 33% of active small cap core managers beating their benchmark. Within the Russell 2000 Index, smaller market caps, higher beta stocks, companies with weaker balance sheets and non-earners tended to outperform for the year. We were happy with the Fund's performance in light of these headwinds.

Portfolio Positioning

We continue to find investment ideas in the consumer sector and retain a sizable overweight in this sector relative to the benchmark. Over the past several quarters, we have reduced our financial overweight, trimming or selling out of some financial names that have appreciated in an effort to take profits, control our sector bets and prudently manage risk in light of the higher valuations in the space. We began the year modestly overweight the sector and ended the fourth quarter roughly equal-weight the index. Meanwhile, we continue to find it challenging to find companies that meet our investment criteria in the healthcare space, and as a result we maintain a sizable underweight of this sector. This underweight weighed on returns in 2013, as the healthcare space was the leading sector in the Russell 2000 this year and finished up 52% versus a 39% increase in the index in aggregate. Finally, we continue to have a moderate 400bps underweight in the technology sector, where it is similarly challenging to find companies with a sustainable competitive advantage and high barriers to entry.

Portfolio Highlights

The most significant contributors to performance during the 12 months ended 31st December 2013, were Zillow Inc. and Jarden Corp. Zillow shares increased 194% as housing data points in the US remained strong and Zillow's quarterly earnings reports showed that its investments in brand advertising are yielding strong results, with robust user growth and agent growth highlighting the network effects in the business model. Although the stock has had a nice run year-to-date, we think the market still under-appreciates Zillow's long term growth opportunity and the quality of the management team. We have taken profits opportunistically throughout the year but continue to think Zillow is a compelling long-term investment. Jarden, a provider of consumer goods and outdoor products, contributed positively to overall results with a 78% return during the period as the stock responded to earnings results that generally exceeded expectations. Moreover, the company has a strong management team, with a prudent capital allocation and active share repurchase programme, which has also helped the shares outperform in 2013.

Over the 12 months ended 31st December 2013, the significant detractors to performance were American Eagle ('AEO') and Joy Global. American Eagle retails men's and women's casual apparel, footwear, outerwear and accessories. The stock fell 28% during the year, as AEO reported weaker than expected top-line growth and gross margins due to increasing competitive pressures in the teen apparel space. This drove negative earnings revisions throughout the year. Though we do not feel that AEO has enterprise risk given its strong balance sheet and net cash position, we are reluctant to increase the position size given the secular pressures and the recent change in the management team. We think the shares are cheap with valuation at trough levels and margins at all time lows, but we do not have enough confidence in the company's execution to increase the position at this time, so we continue to monitor the situation closely. Joy Global manufactures and markets underground mining equipment and surface mining equipment. The stock declined 7% in 2013, as weak coal production drove declines in capital spending among Joy's customers, leading to weak revenues for Joy. We are sticking with Joy Global for now as the company continues to demonstrate strong cost controls and it continues to produce a lot of free cash flow. Management appears willing to return capital to shareholders via share repurchases in 2014, so this could provide somewhat of a floor to the stock until the earnings picture improves. Currently, Joy trades at less than 6x EBITDA, so we believe the company is undervalued at these levels.

Market Outlook

Though we are reluctant to make specific predictions about the market, as we think our talents lie in analysing and selecting specific stocks rather than making macroeconomic forecasts, we generally believe that robust market gains similar to those we witnessed in 2013 will be difficult to replicate in 2014. Sure, there are some reasons to be optimistic. The US economy is improving, consumer confidence is up and headed in the right direction, and there are signs of pent up demand for durable goods. Corporate profit margins are high and balance sheets are healthy, which could spur M&A and/or higher capital spending, the latter of which could create a positive feedback loop for the economy. Nevertheless, we do have some concerns that balance out our optimism. First, interest rates are certainly headed higher and this could weigh on the economic recovery, put pressure on the housing market, and raise the cost of capital for corporations that have been issuing cheap debt to reward shareholders through share repurchases and dividends. It could also unnerve investors who have become accustomed to easy Fed policy and low volatility. Second, valuation levels are somewhat elevated, so we do believe that an improving economic environment is already 'priced in' to some extent. Finally, profit margins are already at peak levels, so we would not expect to see material margin expansion from these levels without a corresponding acceleration in revenue growth, which seems unlikely.

Given our expectations for a more muted return environment, we believe stock selection will be key in 2014. We will stick to our investment process and judge the investment merits of each individual company and stock. We will remain disciplined with regards to our investment strategy: identifying companies with a sustainable competitive advantage, durable business models, and solid management teams who have a track record of value creation. We will buy stakes in these companies at valuations that we believe are below their intrinsic value and offer a margin of safety. Our sector weights will continue to reflect our bottom-up investment analysis and disciplined approach to portfolio construction.

Don San Jose

Dan Percella

Investment Managers

20th March 2014

Directors' Report

Principal Risks

With the assistance of the Manager, JPMorgan Asset Management (UK) Limited ('JPMAM'), 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 excessive concentration of sector selection or the level of gearing, may lead to underperformance against the Company's benchmark index and peer companies, which may result in the Company's shares trading on a wider discount. The Board manages these risks by diversification of investments through its investment restrictions and guidelines which are monitored and reported on. JPMAM 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 tactically, within a strategic range set by the Board. In addition to regular Board reviews of investment strategy, the Board holds a separate meeting devoted to strategy each year.

•   Loss of Investment Team or Investment Manager: a sudden departure of the investment manager, or several members of the investment management team could result in a short-term deterioration in investment performance. The Manager takes steps to reduce the likelihood of such an event by ensuring appropriate succession planning and the adoption of a team-based approach.

•   Discount: a disproportionate widening of the discount relative to the Company's peers could result in a loss of value for Shareholders. In order to manage the Company's discount, which can be volatile, the Company operates a share repurchase programme.

•   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 JPMAM. The Board monitors the implementation and results of the investment process with the Manager.

•   Political and Economic: changes in financial or tax legislation, including in the European Union and the US, may adversely affect the Company. The Manager makes recommendations to the Board on accounting, dividend and tax policies and the Board seeks external advice where appropriate. In addition, the Company is subject to administrative risks, such as the imposition of restrictions on the free movement of capital. These risks are discussed by the Board on a regular basis.

•   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' above. Should the Company breach Section 1158, it may 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 JPMAM 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 and Disclosure and Transparency Rules ('DTRs'). A breach of the Companies Act could result in the Company and/or the Directors being fined or the subject of criminal proceedings. Breach of the UKLA Listing Rules or DTRs could result in the Company's shares being suspended from listing which in turn would breach Section 1158. The Board relies on the services of its Company Secretary, JPMAM, and its professional advisers to ensure compliance with the Companies Act 2006 and the UKLA Listing Rules and DTRs.

•   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 in the Annual Report.

•   Operational: disruption to, or failure of, JPMAM's accounting, dealing or payments systems or the custodian's records may prevent accurate reporting and monitoring of the Company's financial position. Details of how the Board monitors the services provided by JPMAM and its associates and the key elements designed to provide effective internal control are included within the Internal Control section of the Corporate Governance report in the Annual Report.

•   Foreign currency: the Company has exposure to foreign currency as part of the risk reward inherent in a company that invests overseas. The income and capital value of the Company's investments can be affected by exchange rate movements as the majority of the Company's assets and income are denominated in currencies other than sterling which is the reporting currency. The Company's loan facility is denominated in US dollars.

     The Board has the authority to reduce or eliminate the exposure to fluctuating currencies through the use of currency hedging. It reviews its policy on this matter regularly; to date no hedging has been carried out and there are no plans to do so in the immediate future.

•   Financial: the financial risks faced by the Company include market risk (comprising currency risk, interest rate risk and other price risk), liquidity risk and credit risk. Further details are disclosed in note 21 to the accounts in the Annual Report.

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.

Related Parties Transactions

During the year, no transactions with related parties have taken place which have materially affected the financial position or the performance of the Company.

Directors' Responsibilities

The Directors each confirm to the best of their knowledge that:

(a) the financial statements, 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 profit or loss of the Company; and

(b) 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

Davina Walter

Chairman

20th March 2014

Income Statement

for the year ended 31st December 2013

			2013			2012
		Revenue	Capital	Total	Revenue	Capital	Total
		£'000	£'000	£'000	£'000	£'000	£'000
Gains on investments held at fair value through   profit or loss		-	23,204	23,204	-	6,306	6,306
Net foreign currency gains		-	178	178	-	255	255
Income from investments		1,172	-	1,172	1,254	-	1,254
Other interest receivable and similar income		-	-	-	1	-	1
Gross return		1,172	23,382	24,554	1,255	6,561	7,816
Management fee		(96)	(866)	(962)	(63)	(569)	(632)
Performance fee		-	-	-	-	35	35
Other administrative expenses		(368)	-	(368)	(341)	-	(341)
Net return on ordinary activities before finance   costs and taxation		708	22,516	23,224	851	6,027	6,878
Finance costs		(8)	(72)	(80)	(11)	(95)	(106)
Net return on ordinary activities before taxation		700	22,444	23,144	840	5,932	6,772
Taxation		(174)	-	(174)	(187)	-	(187)
Net return on ordinary activities after taxation		526	22,444	22,970	653	5,932	6,585
Return per share (note 3)		10.04p	428.44p	438.48p	12.64p	114.88p	127.52p

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		Capital
	share	Share	redemption	Capital	Revenue
	capital	premium	reserve	reserves	reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000
At 31st December 2011	1,291	-	1,851	53,648	(4,160)	52,630
Repurchase and cancellation of the Company's   own shares	-	-	-	(1)	-	(1)
Net return on ordinary activities	-	-	-	5,932	653	6,585
At 31st December 2012	1,291	-	1,851	59,579	(3,507)	59,214
Shares issued	75	4,550	-	-	-	4,625
Net return on ordinary activities	-	-	-	22,444	526	22,970
Dividends appropriated in the year (note 2a)	-	-	-	(470)	-	(470)
At 31st December 2013	1,366	4,550	1,851	81,553	(2,981)	86,339

Balance Sheet

at 31st December 2013

		2013	2012
		£'000	£'000
Fixed assets
Investments held at fair value through profit or loss		90,867	61,685
Investments in liquidity funds held at fair value through profit or loss		1,381	2,803
		92,248	64,488
Current assets
Debtors		238	50
Cash and short term deposits		1	1,541
		239	1,591
Creditors: amounts falling due within one year		(6,148)	(6,865)
Net current liabilities		(5,909)	(5,274)
Total assets less current liabilities		86,339	59,214
Net assets		86,339	59,214
Capital and reserves
Called up share capital		1,366	1,291
Share premium		4,550	-
Capital redemption reserve		1,851	1,851
Capital reserves		81,553	59,579
Revenue reserve		(2,981)	(3,507)
Total equity shareholders' funds		86,339	59,214
Net asset value per share (note 4)		1,579.6p	1,146.7p

The Company's registration number is 552775.

Cash Flow Statement

for the year ended 31st December 2013

		2013	2012
		£'000	£'000
Net cash outflow from operating activities		(760)	(69)
Returns on investments and servicing of finance
Interest paid		(83)	(106)
Net cash outflow from returns on investments and servicing of finance		(83)	(106)
Taxation
Overseas tax recovered		5	-
Total tax recovered		5	-
Capital expenditure and financial investment
Purchases of investments		(50,465)	(25,923)
Sales of investments		45,560	26,015
Other capital charges		(16)	(3)
Net cash (outflow)/inflow from capital expenditure and financial investment		(4,921)	89
Net cash outflow before management of liquid resources and financing		(5,759)	(86)
Management of liquid resources
Sales/(purchases) of Time Deposits		1,633	(1,538)
Net cash inflow/(outflow) from management of liquid resources		1,633	(1,538)
Dividend paid		(470)	-
Net cash outflow before financing		(4,596)	(1,624)
Financing
Issue of ordinary shares		4,625	-
Repurchase and cancellation of the Company's own shares		-	(1)
Net cash inflow/(outflow) from financing activity		4,625	(1)
Increase/(decrease) in cash		29	(1,625)

Notes to the Accounts

for the year ended 31st December 2013

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', issued by the Association of Investment Companies in January 2009. All of the Company's operations are of a continuing nature.

      The disclosures on going concern in the Directors' Report of the Annual Report and Accounts form part of these accounts.

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

2.   Dividend

(a)  Dividends paid

	2013	2012
	£'000	£'000
Final dividend of 9.10p (2011: 0.00p)1	470	-
Total dividends paid in the year	470	-

¹The final dividend declared in respect of the year ended 31st December 2012, which was paid in 2013, amounted to £469,890 (2011: £nil). This distribution was paid from capital reserves in accordance with the Company's Articles of Association.

The final dividend has been proposed in respect of the year ended 31st December 2013 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 ended 31st December 2014.

(b) Dividend for the purposes of Section 1158 of the Corporation Tax Act 2010 ('Section 1158')

The requirements of section 1158 of the Income and Corporation Taxes Act 1988 are considered on the basis of dividends proposed in respect of the financial year, as follows:    

	2013	2012
	£'000	£'000
Final dividend of 7.00p1 (2012: 9.10p)	383	470
Total dividends for s1158 purposes	383	470

¹Following the subdivision of the Company's shares on a 10 for 1 basis, effective on 6th March 2014, the final dividend proposed will be 0.70p per share.

      The revenue available for distribution by way of dividend for the year is £526,000 (2012: £653,000).

3.   Return per share

The revenue return per share is based on the earnings attributable to the ordinary shares of £526,000 (2012: £653,000) and on the weighted average number of shares in issue during the year of 5,238,592 (2012: 5,163,623).

The capital return per share is based on the capital return attributable to the ordinary shares of £22,444,000 (2012: £5,932,000) and on the weighted average number of shares in issue during the year of 5,238,592 (2012: 5,163,623).

The total return per share is based on the total return attributable to the ordinary shares of £22,970,000 (2012: £6,585,000) and on the weighted average number of shares in issue during the year of 5,238,592 (2012: 5,163,623).

4.   Net asset value per share

	Net asset value per share		Net assets attributable
	2013	2012	2013	2012
	pence	pence	£'000	£'000
Ordinary shares	1,579.6	1,146.7	86,339	59,214

The net asset value per share is based on the net assets attributable to the ordinary shareholders of £86,339,000 (2012: £59,214,000) and on the 5,465,780 (2012: 5,163,623) shares in issue at the year end, excluding shares held in Treasury.

5.   Status of announcement

2012 Financial Information

The figures and financial information for 2012 are extracted from the published Annual Report and Accounts for the year ended 31st December 2012 and do not constitute the statutory accounts for that year.  The Annual Report and Accounts has been delivered to the Registrar of Companies and included the Report of the Independent Auditors which was unqualified and did not contain a statement under either section 498(2) or section 498(3) of the Companies Act 2006.

2013 Financial Information

The figures and financial information for 2013 are extracted from the Annual Report and Accounts for the year ended 31st December 2013 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 (UK) LIMITED

20th March 2014

For further information:

Lucy Dina

JPMorgan Asset Management (UK) Limited                 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.jpmussmallercompanies.co.uk where up to date information on the Company, including daily NAV and share prices, factsheets and portfolio information can also be found.

JPMORGAN ASSET MANAGEMENT (UK) LIMITED

 

END

 

 

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