Half Year Results

RNS Number : 5141W

JPMorgan US Smaller Co. IT

19 August 2015

 

LONDON STOCK EXCHANGE ANNOUNCEMENT

JPMORGAN US SMALLER COMPANIES INVESTMENT TRUST PLC

UNAUDITED HALF YEAR RESULTS FOR THE SIX MONTHS ENDED

30TH JUNE 2015

Chairman's Statement

Performance

It is pleasing to report a rise of 4.6% in the Company's net asset value ('NAV') for the first six months of 2015, which compares with a rise of 3.8% in the Russell 2000 Index in sterling terms, as these figures mask a volatile period for US equities. Market sentiment at the beginning of 2015 benefited from the perceived improvement in Europe and the drastic decline in the oil price. The sell-off in the latter part of the period under review was caused by the strength of the US dollar, the low oil price together with concerns about China and the Eurozone, which combined have put corporate profits under pressure, giving rise to worries about valuations.

Discount and Premium

The Company's share price rose 2.0% during the first six months of 2015, lagging the increase in NAV and resulting in a small widening of the discount. Whilst it is disappointing to report the shares' discount widened at the end of June, US smaller companies are seen as riskier assets, and therefore volatile in nature, and aligning our share price movement with the change in the NAV is always going to be challenging. This relationship is monitored on a daily basis by the Board and our professional advisers and to help with the management of the discount we have in place the authority to repurchase up to 14.99% of the Company's issued share capital. This authority has not been used during the first six months of 2015.

Board Changes

At the recent Annual General Meeting Alan Kemp retired and the Board are grateful for the strong contribution he has made. Meanwhile we were delighted to welcome David Ross as an independent non-executive Director who joined us in March. David started his career at Ivory & Sime and in 1990 became one of the founding partners of Aberforth Partners, the specialist UK small cap manager. The Board is pleased to be joined by such an experienced investment professional, with considerable knowledge of both small cap stocks and investment trusts.

Outlook

At the time of writing this statement we are entering the holiday period which in the past has produced volatile markets as bad news (or good) can trigger sharp moves on light volumes. There is clearly much uncertainty in markets currently and reasons to be cautious over the short term, however these set-backs often produce good investment opportunities for long term patient investors. We would also expect the investment team's focus on balance sheet strength and intrinsic value to provide some protection to the Company's portfolio. Over the longer term the US economy has demonstrated its ability to create exciting growth prospects in the small cap sector and our Company should continue to take advantage of these opportunities.

Davina Walter

Chairman                                                                                                                                        

19th August 2015

Investment Manager's Report

Market Review

US equity markets experienced somewhat of a roller coaster over the first six months of the year. Investors felt relief when crude oil prices began to rebound and the US dollar's appreciation began to slow down. Brisk merger and acquisition activity has also been supportive of equities. However, investor sentiment remained cautious as global currency and fixed income markets were quite volatile. As the six months came to a close, fears surrounding Greece re-emerged and US equity markets sold off as Greece missed a payment to the International Monetary Fund (IMF). Large cap stocks as represented by the S&P 500 Index managed a small advance of 0.2%, while more domestically focused small cap stocks fared better as evidenced by the Russell 2000 Index's gain of 3.8%, all in sterling terms.

Recent economic releases point to a US economy reaccelerating modestly from its 1st quarter lull. The June Employment Report wasn't spectacular, but solid. Non-farm payrolls grew by a healthy 223,000 in June, in line with the consensus estimate of 233,000. These payrolls numbers have continued the trend over the last three years of slow and steady progress on the employment front. The housing market and the US consumer are also seeing improving trends. While new home sales remain at low levels by historic standards, the pace of sales in May was the highest reported since February of 2008.

Across the market caps, growth is outperforming value so far this year as investors grapple with a continuation of the low economic growth scenarios around the world. Within the Russell 2000, the sectors that stand out on the positive side are health care, technology and consumer discretionary. Health care has been bolstered by strong product pipelines and a wave of M&A that has driven shares higher. With the decline in the price of oil, the US consumer has spent a little of the incremental savings on new retail purchases and travel. However, the most interesting thing to note in this environment of significantly lower oil prices is that the US consumer has managed to increase their savings rate and not spend all of the windfall from the lower price of oil. Not surprisingly one of the weakest sectors in the year to date period is the energy sector, as earnings estimates have been slashed and companies are reacting as quickly as they can to adjust their cost structures lower.

Performance

The Company's net asset value grew by 4.6% over the first six months of 2015. The return was ahead of the benchmark, the Russell 2000 Index, which rose by 3.8%. When reviewing the portfolio's performance, the majority of the performance was driven by our stock picking which is highlighted in more detail in the following paragraphs. Additionally, in a rising equity environment, the portfolio's gearing also contributed, although to a lesser extent.

In terms of key drivers of relative performance, the portfolio benefitted from strong stock selection in the financial services and consumer discretionary sectors. In the financial services sector, our exposure to software provider Advent Software and commercial real estate broker Marcus & Millichap proved beneficial. Shares of Advent Software, which provides software to investment management firms, rose strongly during the period due to the announcement that its rival SS&C Technologies would be acquiring the company. Given the pending acquisition we have been trimming our position as the share price has rallied. Marcus & Millichap reported strong earnings during the period which was predominately driven by a strong commercial real estate (CRE) market as transaction volumes and CRE prices are approaching prior peak levels. Within the consumer discretionary space, we had good performance from a host of names rather than any stand out performers. Amongst the names adding value were Papa John's International and Sequential Brands Group. Pizza chain Papa John's reported much better than expected Q1 results driven by both strong sales and margins. The company continues to perform very strongly from a same restaurant sales perspective and also improving margins which have been aided by lower cheese prices. Additionally, the company's international locations are finally starting to gain traction from a profitability standpoint. We continue to like Papa John's due to their strong brand and large insider ownership. However, the valuation has also risen, so we have selectively trimmed our position on this strength. Sequential Brands, a diversified consumer products company specialising in brand management and licensing, saw its share price increase over the period after announcing the addition of two prominent brands, Jessica Simpson and Martha Stewart, to its line-up. The company's strong stable of brands compete very effectively against peers. We like the high free cash flow generation of the businesses they hold, and how management thoughtfully allocate capital.

In terms of some individual names that helped, our overweight position in Freescale Semiconductor was the top contributor to relative performance. The company designs and manufactures embedded processors for the global automotive, networking and industrial end markets. Freescale was a strong performer in the period driven by the announcement that NXP Semiconductors would be acquiring the company. We have taken advantage of Freescale's share price appreciation to reduce our exposure.

In contrast, our relative performance was hindered by both our stock and sector positioning in the health care sector. As we mentioned previously, health care was the best performing sector in the Russell 2000 over the period, and its strong performance was aided significantly by the performance of the biotech segment. We have no exposure to this area, as we find if difficult to find biotech companies which meet our investment criteria, and our underweight hindered relative performance. With regards to stock selection, our exposure to IDEXX Laboratories also weighed on our performance in this sector. IDEXX provides diagnostic testing products and reference lab services to companion animal veterinary practices worldwide. The stock exhibited some weakness due to mis-execution by management around the company's recent move to all-direct distribution. While the company's key profit centres, diagnostic consumables and reference lab services, posted solid organic growth in their earnings report, the company's much smaller rapid assay business suffered a decline. Management blamed the weakness on unexpected competitive pressure in first generation stand-alone feline tests. While these tests are fairly immaterial at less than 5% of revenue and carry relatively lower margins, the stock sold off on concerns that this competitive pressure would spread into the company's much more lucrative diagnostic consumables business now that the distribution landscape is open to competitors. While some concern is warranted, we have seen compelling evidence that suggests the competitive pressure will be largely contained to the stand-alone feline tests, and our conversations with management suggest that competitive pressure is not getting worse. Customer retention in IDEXX's key diagnostic modalities remains at 96-98%, and we think the fact that IDEXX continues to spend 80% of the veterinary diagnostic industry's R&D dollars will enable them to retain the strong competitive position they have always enjoyed. We believe IDEXX remains a compelling long term investment and have been adding to our position on weakness.

In addition, our overweight position in the producer durables name Generac, which manufacturers portable and standby generators and mobile light towers, also detracted. Disappointing performance in the company's residential standby business, which is driven by electricity outages from storm activity, weighed on the stock. US outages have been below normal for several years following Hurricane Sandy, which has put pressure on top-line growth in recent quarters. Moreover, Generac had been offsetting some of the weakness in the residential standby market by a strong commercial and industrial (C&I) business which was being driven by telecom carriers installing backup power on cell towers. However, consolidation in the telecom space in 2014-2015 has resulted in a short-term freeze/reduction to capex spending by telecom carriers to fund M&A, which has weighed on C&I revenues at Generac. We remain confident in the management team and their strategy, but without any insight and visibility into when storm activity increases from current trough levels, we have not aggressively added to the position, though we do consider Generac a core holding at current levels.

In terms of our overall positioning, we remain focused on finding companies with durable franchises, good management teams and stable earnings that trade at a discount to intrinsic value. Not much has changed in terms of sector exposure over this period and the consumer discretionary, producer durables and materials & processing are the largest overweight sectors. In contrast, our largest underweights are focused in health care, technology and utilities.

In terms of the Company's level of gearing, which was 9.4% as of 30th June 2015, it has increased slightly from six months ago, when it was 6.5%. As always, we will look to add or trim our gearing opportunistically.

Market Outlook

Little has changed since I wrote my 2014 annual commentary to affect our outlook for the US equity market and we continue to remain somewhat constructive on the outlook for US equities. Our view of overall profitability has not altered much; our 2015 forecasts have stabilised after the sharp downwards revisions required by the rise in the Dollar and fall in the oil price, and our long-term estimates actually edged slightly higher over the period. Upwards revisions were concentrated in the healthcare, media and financial sectors, with the industrials the focus for lower forecasts. For most companies, fundamentals still look pretty strong, with an improvement in domestic consumer spending a healthy antidote to weak demand in many foreign economies. And even with operating margins close to record levels, revenue gains are still being enhanced by operating margin improvement. This "golden age" of profitability will suffer another cyclical interruption at some point, but we see little chance of that in the domestic economy for at least a couple of years. And from a long-term viewpoint, eventually competition must rise and high margins will be undermined, but so far most American companies have proved resilient to global competition. Overall we see little growth in profits this year thanks to the strong Dollar and weak oil price, but the underlying growth rate looks solid enough to sustain operating profits growth in the mid-single digits.

Meanwhile the use of capital remains a huge theme and differentiator in the current market. Stock buybacks at record levels are boosting earnings growth by about 2% this year, although the market is rewarding buybacks less these days, which is a logical response to the much higher prices that companies now have to pay when repurchasing their own shares. The M&A cycle is now in full swing, driven by abundant cash flow and cheap financing. Deals are coming thick and fast, especially in the healthcare sector, while the market is still often rewarding acquirers as well of course as the targets. Eventually M&A booms end in tears with companies overreaching and overpaying, but we do not think we have reached that stage just yet.

For this outlook, investors are paying around 19 times forward earnings estimates for the small cap market; not cheap at all, and a premium to large caps, though valuation levels in equities do seem more reasonable relative to fixed income alternatives, especially when comparing today's earnings yields with the yield on the ten year government bond and long-term interest rates. We would expect equities to be a bit more volatile in the second half, especially as the Fed begins to increase rates. While the stock market has been very easy to live with in recent years history tells us that single-digit returns and double-digit volatility are the norm. Setbacks of 8-10% in the market are both inevitable and impossible to forecast, but bigger declines usually come at the end of the business cycle, though we suspect that this cycle may have a few years left to run.

Don San Jose

Dan Percella

Investment Managers                                                                                                                     

19th August 2015

Interim Management Report

The Company is required to make the following disclosures in its Half Year Report:

Principal Risks and Uncertainties

The principal risks and uncertainties faced by the Company remain unchanged and fall into the following broad categories: investment and strategy; loss of investment team or investment manager; discount; market; political and economic; accounting, legal and regulatory; corporate governance and shareholder relations; operational; foreign currency; going concern; and financial. Information on each of these areas is given in the Business Review within the Annual Report and Accounts for the year ended 31st December 2014.

Related Parties Transactions

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

Going Concern

The Directors believe, having considered the Company's investment objectives, risk management policies, capital management policies and procedures, nature of the portfolio and expenditure projections, that the Company has adequate resources, an appropriate financial structure and suitable management arrangements in place to continue in operational existence for the foreseeable future and, more specifically, that there are no material uncertainties pertaining to the Company that would prevent its ability to continue in such operation existence for at least twelve months from the date of the approval of this half yearly financial report. For these reasons, they consider there is reasonable evidence to continue to adopt the going concern basis in preparing the accounts.

Directors' Responsibilities

The Board of Directors confirms that, to the best of its knowledge:

(i) the condensed set of financial statements contained within the half yearly financial report has been prepared in accordance with the Accounting Standards Board's Statement 'Half Yearly Financial Reports' and gives a true and fair view of the state of affairs of the Company and of the assets, liabilities, financial position and net return of the Company, as at 30th June 2015, as required by the UK Listing Authority Disclosure and Transparency Rules 4.2.4R; and

(ii)     the interim management report includes a fair review of the information required by 4.2.7R and 4.2.8R of the UK Listing Authority Disclosure and Transparency Rules.

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 accounting 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.

For and on behalf of the Board

Davina Walter

Chairman                                                                                                                                        

19th August 2015

Statement of Comprehensive Income

for the six months ended 30th June 2015

	(Unaudited)			(Unaudited)				(Audited)
	Six months ended			Six months ended				Year ended
	30th June 2015			30th June 2014				31st December 2014
	Revenue	Capital	Total	Revenue	Capital	Total	Revenue		Capital	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000		£'000	£'000
Gains/(losses) on investments
held at fair value through
profit or loss	-	4,615	4,615	-	(184)	(184)	-		12,132	12,132
Net foreign currency gains/(losses)	-	158	158	-	209	209	-		(371)	(371)
Income from investments	897	-	897	656	-	656	1,390		-	1,390
Gross return	897	4,773	5,670	656	25	681	1,390		11,761	13,151
Management fee	(67)	(607)	(674)	(56)	(505)	(561)	(114)		(1,027)	(1,141)
Other administrative expenses	(206)	-	(206)	(170)	-	(170)	(402)		-	(402)
Net return/(loss) on ordinary
activities before finance costs
and taxation	624	4,166	4,790	430	(480)	(50)	874		10,734	11,608
Finance costs	(5)	(43)	(48)	(4)	(29)	(33)	(9)		(68)	(77)
Net return/(loss) on ordinary
activities before taxation	619	4,123	4,742	426	(509)	(83)	865		10,666	11,531
Taxation	(122)	-	(122)	(99)	-	(99)	(218)		-	(218)
Net return/(loss) on ordinary
activities after taxation	497	4,123	4,620	327	(509)	(182)	647		10,666	11,313
Return/(loss) per share (note 4)	0.89p	7.35p	8.24p	0.58p	(0.90)p	(0.32)p	1.15p		18.96p	20.11p

All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued in the period.

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.

Statement of Changes in Equity

	Called up		Capital
Six months ended	share	Share	redemption	Capital	Revenue
30th June 2015	capital	premium	reserve	reserves1	reserve1	Total
(Unaudited)	£'000	£'000	£'000	£'000	£'000	£'000
At 31st December 2014	1,424	7,936	1,851	90,471	(2,334)	99,348
Shares issued from Treasury	-	60	-	196	-	256
Net return on ordinary activities	-	-	-	4,123	497	4,620
At 30th June 2015	1,424	7,996	1,851	94,790	(1,837)	104,224
	Called up		Capital
Six months ended	share	Share	redemption	Capital	Revenue
30th June 2014	capital	premium	reserve	reserves1	reserve1	Total
(Unaudited)	£'000	£'000	£'000	£'000	£'000	£'000
At 31st December 2013	1,366	4,550	1,851	81,553	(2,981)	86,339
Shares issued	58	3,391	-	-	-	3,449
Net (loss)/return on ordinary activities	-	-	-	(509)	327	(182)
Dividends appropriated in the period	-	-	-	(398)	-	(398)
At 30th June 2014	1,424	7,941	1,851	80,646	(2,654)	89,208
	Called up		Capital
Year ended	share	Share	redemption	Capital	Revenue
31st December 2014	capital	premium	reserve	reserves1	reserve1	Total
(Audited)	£'000	£'000	£'000	£'000	£'000	£'000
At 31st December 2013	1,366	4,550	1,851	81,553	(2,981)	86,339
Shares issued	58	3,643	-	-	-	3,701
Repurchase of shares into Treasury	-	-	-	(1,350)	-	(1,350)
Costs of placing	-	(257)	-	-	-	(257)
Net return on ordinary activities	-	-	-	10,666	647	11,313
Dividends appropriated in the year	-	-	-	(398)	-	(398)
At 31st December 2014	1,424	7,936	1,851	90,471	(2,334)	99,348

¹These reserves form the distributable reserves of the Company and may be used to fund distribution of profits to investors via dividend payments.

Statement of Financial Position

at 30th June 2015

	(Unaudited)	(Unaudited)	(Audited)
	30th June 2015	30th June 2014	31st December 2014
	£'000	£'000	£'000
Fixed assets
Investments held at fair value through profit or loss	114,057	93,814	105,663
Cash equivalents (including liquidity funds) held at
fair value through profit or loss1	2,910	2,072	2,264
	116,967	95,886	107,927
Current assets
Debtors	352	305	216
Cash and short term deposits	1	-	907
	353	305	1,123
Creditors: amounts falling due within one year2	(13,096)	(6,983)	(9,702)
Net current liabilities	(12,743)	(6,678)	(8,579)
Total assets less current liabilities	104,224	89,208	99,348
Net assets	104,224	89,208	99,348
Capital and reserves
Called up share capital	1,424	1,424	1,424
Share premium	7,996	7,941	7,936
Capital redemption reserve	1,851	1,851	1,851
Capital reserves	94,790	80,646	90,471
Revenue reserve	(1,837)	(2,654)	(2,334)
Shareholders' funds	104,224	89,208	99,348
Net asset value per share (note 5)	185.5p	156.6p	177.3p

¹This line item was shown as 'Investment in liquidity fund held at fair value through profit or loss' in the financial statements for the year ended 31st December 2014.

²At 30th June 2015, the Company had drawn down US$20.0 million (GBP £12.7 million equivalent) on its loan facility with Scotiabank.

Statement of Cash Flows

for the six months ended 30th June 2015

	(Unaudited)	(Unaudited)	(Audited)
	Six months ended	Six months ended	Year ended
	30th June 2015	30th June 2014	31st December 2014
	£'000	£'000	£'000
Cash outflow from operations (note 6)	(77)	(122)	(364)
Interest paid	(51)	(41)	(71)
Overseas tax recovered	16	16	23
Net cash outflow from operating activities	(112)	(147)	(412)
Purchases of investments	(13,225)	(15,059)	(31,048)
Sales of investments	9,576	12,903	28,208
Other capital charges	(1)	(128)	(5)
Net cash outflow from investing activities	(3,650)	(2,284)	(2,845)
Dividends paid	-	(398)	(398)
Drawdown of bank loans	3,289	6,013	9,197
Repayment of bank loans	-	(6,013)	(6,013)
Shares issued from Treasury	256	-	-
Issue of ordinary shares	-	3,574	3,444
Repurchase of shares into Treasury	-	-	(1,350)
Net cash inflow from financing activities	3,545	3,176	4,880
Increase/(decrease) in cash and cash equivalents	(217)	745	1,623
Cash and cash equivalents at the start of the period	3,171	1,382	1,382
Exchange movements	(43)	(55)	166
Cash and cash equivalents at the end of the period	2,911	2,072	3,171
(Decrease)/increase in cash and cash equivalents	(217)	745	1,623
Cash and cash equivalents consist of:
Cash at bank	1	-	907
Investments in Liquidity funds	2,910	2,072	2,264
	2,911	2,072	3,171

Notes to the Financial Statements

for the six months ended 30th June 2015

1.    Financial statements

      The information contained within the Financial Statements in this Half Year Report has not been audited or reviewed by the Company's Auditor.

      The figures and financial information for the year ended 31st December 2014 are extracted from the latest published accounts of the Company and do not constitute statutory accounts for that year. Those financial statements have been delivered to the Registrar of Companies and included the report of the Auditor which was unqualified and did not contain a statement under either section 498(2) or 498(3) of the Companies Act 2006.

2.   Accounting policies

The financial statements have been prepared in accordance with the Companies Act 2006, FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' of the 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 revised 'SORP') issued by the Association of Investment Companies in November 2014.

FRS 104 'Interim Financial Reporting', issued by the Financial Reporting Council ('FRC') in March 2015 has been applied in preparing this condensed set of financial statements for the six months ended 30th June 2015.

As a result of the first time adoption of FRS 102 and the revised SORP, comparative numbers and presentational formats have been restated where required.

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

The accounting policies applied to this condensed set of financial statements are consistent with those applied in the financial statements for the year ended 31st December 2014 with the following exceptions and amendments:

Finance costs

Finance costs are accounted for on an accruals basis using the effective interest rate method in accordance with the provisions of FRS 102.

Financial instruments

Cash and cash equivalents may comprise cash (including demand deposits which are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value) as well as cash equivalents (in accordance with the requirements of the Alternative Investment Fund Managers Directive regulations, investments are regarded as cash equivalents if they meet all of the following criteria; highly liquid investments held in the sub-fund's base currency that are readily convertible to a known amount of cash, are subject to an insignificant risk of change in value and provide a return no greater than the rate of a three-month high quality government bond).

Functional currency

In accordance with FRS 102 the Company is required to identify its functional currency, being the currency of the primary economic environment in which the Company operates. The Board, having regard to the currency of the Company's share capital and the predominant currency in which its shareholders operate, has determined that sterling is the functional currency. Sterling is also the currency in which the accounts are presented.

Taxation

Current tax is provided at the amounts expected to be paid or received.

Deferred tax is accounted for in accordance with FRS 102.

Dividends payable

In accordance with FRS 102, the final dividend is included in the accounts in the year in which it is approved by shareholders.

Repurchases of ordinary shares for cancellation

The cost of repurchasing ordinary shares including the related stamp duty and transactions costs is charged to capital reserves and dealt with in the Statement of Changes in Equity.

Repurchase of shares to hold in Treasury

The cost of repurchasing shares into Treasury, including the related stamp duty and transaction costs is charged to capital reserves and dealt with in the Statement of Changes in Equity.

Only the relevant section of the applicable policies from the last year end accounts which have changed as a result of the application of the 2014 AIC SORP and FRS 102 have been reproduced above - all other aspects of those policies remain the same. The impact of the changes is substantially in relation to presentational, disclosure and non-quantifiable aspects.

3.   Dividend

	(Unaudited)	(Unaudited)	(Audited)
	Six months ended	Six months ended	Year ended
	30th June 2015	30th June 2014	31st December 2014
	£'000	£'000	£'000
Final dividend paid in respect of the year ended
31st December 2014 of nil (2013: 0.7p)	-	398	398

      No interim dividend has been declared in respect of the six months ended 30th June 2015 (2014: Nil). The figure of £398,000 reflects the dividend paid in May 2014 in respect of the year ended 31st December 2013.

      All the dividends paid and declared in the period have been funded from the Capital Reserve.

4.   Return/(loss) per share

	(Unaudited)	(Unaudited)	(Audited)
	Six months ended	Six months ended	Year ended
	30th June 2015	30th June 2014	31st December 2014
	£'000	£'000	£'000
Return/(loss) per share is based on the following:
Revenue return	497	327	647
Capital return/(loss)	4,123	(509)	10,666
Total return/(loss)	4,620	(182)	11,313
Weighted average number of shares in issue	56,128,939	56,358,013	56,265,899
Revenue return per share	0.89p	0.58p	1.15p
Capital return/(loss) per share	7.35p	(0.90)p	18.96p
Total return/(loss) per share	8.24p	(0.32)p	20.11p

5.   Net asset value per share

      Net asset value per share is based on the net assets attributable to ordinary shareholders of £104,224,000 (30th June 2014: £89,208,000 and 31st December 2014: £99,348,000) and on the 56,175,928 (30th June 2014: 56,970,928 and 31st December 2014: 56,040,928) shares in issue at the period end.

6.   Reconciliation of total return/(loss) on ordinary activities before finance costs and taxation to net cash outflow from operating activities

	(Unaudited)	(Unaudited)	(Audited)
	Six months ended	Six months ended	Year ended
	30th June 2015	30th June 2014	31st December 2014
	£'000	£'000	£'000
Net return/(loss) on ordinary activities before finance
costs and taxation	4,790	(50)	11,608
(Less capital return)/Add capital loss on ordinary activities
before finance costs and taxation	(4,166)	480	(10,734)
Decrease in net debtors and accrued income	71	99	11
(Decrease)/increase in accrued expenses	(27)	(34)	8
Management fee charged to capital	(607)	(505)	(1,027)
Overseas withholding tax	(138)	(112)	(230)
Net cash outflow from operating activities	(77)	(122)	(364)

7.   Fair valuation of investments

The fair value hierarchy analysis for investments held at fair value at the period end is as follows:

	(Unaudited)		(Unaudited)		(Audited)
	Six months ended		Six months ended		Year ended
	30th June 2015		30th June 2014		31st December 2014
	Assets	Liabilities	Assets	Liabilities	Assets	Liabilities
	£'000	£'000	£'000	£'000	£'000	£'000
Quoted prices for identical instruments in active markets	114,057	-	93,814	-	105,663	-
Prices of recent transactions for identical instruments1	2,910	-	2,072	-	2,264	-
Total value of investments	116,967	-	95,886	-	107,927	-

      ¹Includes JPMorgan US Dollar Liquidity Fund.

 

For further information, please contact:

Lucy Dina

For and on behalf of

JPMorgan Funds Limited, Secretary

020 7742 4000

Please note that up to date information on the Company, including daily NAV and share prices, factsheets and portfolio information can be found at www.jpmussmallercompanies.co.uk

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 FUNDS LIMITED

ENDS

A copy of the half year has been submitted to the National Storage Mechanism and will shortly be available for inspection at www.morningstar.co.uk/uk/NSM

The half year 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.

 

END

 

 

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