Interim Results

JPMorgan US Discovery IT PLC 20 September 2007 LONDON STOCK EXCHANGE ANNOUNCEMENT JPMORGAN US DISCOVERY INVESTMENT TRUST PLC UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30TH JUNE 2007 The following are comments from the Chairman: Performance Despite a volatile stock market, I am pleased to report that over the six months to 30th June 2007, the Company's total return on net assets of +4.1% outperformed the total return for the Company's benchmark, the Russell 2000 index, of +3.7%. Over the same period, the Company's total return to shareholders was better still at +6.8%, as the discount narrowed from 10.2% to 8.1%. Share Buybacks At the Annual General Meeting held in April 2007, the authority to repurchase up to 14.99% of the Company's issued share capital was renewed. Over the six months to 30th June 2007, 1,088,000 shares were repurchased and cancelled at an average discount of 8.19%. Shareholders also gave the Board authority to allot new ordinary shares in the Company and reissue ordinary shares from Treasury. During the reporting period, no shares were issued, but a total of 380,000 shares were repurchased to hold in Treasury at an average discount of 8.73%. Since the period end a further 62,000 shares have been repurchased and held in Treasury. Where necessary, such Treasury shares will be re-issued at a limited discount to net asset value to manage any imbalance between supply and demand, and hence improve liquidity in the shares. The Board will continue to monitor the discount and its volatility closely. Gearing As reported in my annual statement, the Company's single borrowing facility was renewed at US$28m in January 2007 to allow the Managers to manage gearing actively to enhance returns to shareholders. The Company had drawn down US$13.9m as at the date of this announcement. The following are comments from the Investment Manager: Investment Performance The Company's NAV advanced 4.1% during the first six months of 2007, which was slightly ahead of the performance of the Russell 2000 index which returned +3.7%. Performance during the period under review was mixed due to a volatile stock market that saw the strong start to the year followed by a sharp sell-off in March, and then a powerful recovery fuelled largely by an explosion in takeover activity by private equity funds. The Company benefited from the corporate activity when ECollege was taken over by Pearson at a modest premium. In general, however, investors in the microcap universe continued to face a headwind as large cap stocks outperformed smaller stocks. The second quarter earnings season for microcap stocks was more robust than predicted and performance has improved steadily since the March sell-off. At the time of writing the Company has continued to weather the market turmoil. At the sector level, performance during the first half of 2007 was negatively impacted by stock selection in the Consumer Discretionary and Healthcare sectors, which represented 28% and 14% of the portfolio respectively at 30th June 2007. This was offset by stock selection in the portfolio's two other large sectors, Financial Services and Technology, which represented 20% and 11% of the portfolio respectively. Portfolio Highlights The top three contributors to performance were Hemosense, FirstService, and Magma Design. Hemosense, a manufacturer of handheld blood coagulation monitoring systems, advanced 111% during the period, as the company continued to demonstrate market share gains and signed a landmark deal with the Laboratory Corporation of America. Property services provider FirstService Corporation's shares advanced 56% from a combination of strong results and an increase in the stock's valuation. Finally, Magma Design Automation, a software provider to integrated circuit designers, advanced 57% from both a favourable litigation settlement and continued market share gains. The top three detractors from performance were Five Star Quality Care, Youbet.com and Investools. Five Star Quality Care, a senior living facility operator, declined 28% after the company reported second quarter results marked by a slight decline in occupancy rates. On-line bookmakers' website Youbet.com declined 34% as the company lost a portion of its content due to an industry shake-up. Investools, an on-line brokerage and investor education provider, declined 28% as the growth rate of students acquired through their partner channel slowed down. Market Outlook While second quarter earnings results have been mostly favorable, investors have been more focused on market risks, and more specifically the rapid deterioration in the sub-prime credit market. This has caused some materially above average volatility in the market, short-term paralysis in other parts of the credit markets and some high profile problems in the hedge fund world. However, unlike some previous credit crises, outside the sub-prime housing market, business fundamentals, corporate cash flows and balance sheets are as strong as they have been in a decade. As such they provide a solid footing for stabilization in markets, once the pain of poor lending decisions in the sub-prime market has been absorbed by the banks and hedge funds that made the poor underwriting decisions. We have continued to concentrate the Company's portfolio in our highest conviction names and believe that the current market environment will produce some interesting investment opportunities. Robin Lewis Chairman 20th September 2007 For further information please contact: Lucy Dina JPMorgan Asset Management (UK) Limited Telephone 0207 742 6000 JPMorgan US Discovery Investment Trust plc Unaudited figures for the six months ended 30th June 2007 Income Statement (Unaudited) (Unaudited) (Audited) Six months ended 30th June 2007 Six months ended 30th June Year ended 31st December 2006 2006 Revenue Capital Total Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Gains/(losses) from investment held at fair value through profit or loss - 3,238 3,238 - (2,602) (2,602) - (3,425) (3,425) Net foreign currency - 254 254 - 586 586 - 1,178 1,178 gains Income from investments 171 - 171 149 - 149 293 - 293 Other interest receivable and similar income 5 - 5 5 - 5 7 - 7 _______ ________ _______ _______ _______ _______ _______ _______ _______ Gross return/(loss) 176 3,492 3,668 154 (2,016) (1,862) 300 (2,247) (1,947) Management fee (46) (419) (465) (51) (463) (514) (97) (874) (971) Performance Fee - 115 115 - 390 390 - 903 903 Other administrative expenses (137) - (137) (155) - (155) (260) - (260) _______ _______ _______ _______ _______ _______ _______ _______ _______ Net (loss)/return on ordinary activities before finance costs and taxation (7) 3,188 3,181 (52) (2,089) (2,141) (57) (2,218) (2,275) Finance costs (33) (295) (328) (22) (195) (217) (52) (466) (518) _______ _______ _______ _______ _______ _______ _______ _______ _______ Net (loss)/return on ordinary activities before taxation (40) 2,893 2,853 (74) (2,284) (2,358) (109) (2,684) (2,793) Taxation (25) - (25) (22) - (22) (43) - (43) ______ _______ _______ _______ _______ _______ _______ _______ _______ Net (loss)/return on ordinary activities after taxation (65) 2,893 2,828 (96) (2,284) (2,380) (152) (2,684) (2,836) ===== ===== ===== ===== ===== ===== ===== ===== ===== (Loss)/return per share (note 3) (0.67)p 29.96p 29.29p (0.94)p (22.48)p (23.42)p (1.49)p (26.42)p (27.91)p 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. 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. JPMorgan US Discovery Investment Trust plc Reconciliation of Movements in Shareholders' Funds Called up Capital Unaudited figures for the six months share redemption Capital Revenue ended 30th June 2007 capital reserve reserve reserve Total £'000 £'000 £'000 £'000 £'000 At 31st December 2006 2,540 602 94,753 (4,703) 93,192 Repurchase and cancellation of shares (272) 272 (9,412) - (9,412) Repurchase of shares into treasury - - (3,315) - (3,315) Capital return from ordinary activities - - 2,893 - 2,893 Revenue loss from ordinary activities - - - (65) (65) _______ ________ _______ _______ ________ At 30th June 2007 2,268 874 84,919 (4,768) 83,293 ===== ===== ===== ===== ===== Called up Capital Unaudited figures for the six months share redemption Capital Revenue ended 30th June 2006 capital reserve reserve reserve Total £'000 £'000 £'000 £'000 £'000 At 31st December 2005 2,540 602 97,437 (4,551) 96,028 Capital loss from ordinary activities - - (2,284) - (2,284) Revenue loss from ordinary activities - - - (96) (96) _______ ________ _______ _______ ________ At 30th June 2006 2,540 602 95,153 (4,647) 93,648 ===== ===== ===== ===== ===== Called up Capital Audited figures for the year ended share redemption Capital Revenue 31st December 2006 capital reserve reserve reserve Total £'000 £'000 £'000 £'000 £'000 At 31st December 2005 2,540 602 97,437 (4,551) 96,028 Capital loss from ordinary activities - - (2,684) - (2,684) Revenue loss from ordinary activities - - - (152) (152) _______ ________ _______ _______ ________ At 31st December 2006 2,540 602 94,753 (4,703) 93,192 ===== ===== ===== ===== ===== JPMorgan US Discovery Investment Trust plc BALANCE SHEET (Unaudited) (Unaudited) (Audited) 30th June 2007 30th June 2006 31st December 2006 £'000 £'000 £'000 Fixed assets Investments at fair value through profit or loss 96,674 106,553 104,813 Current assets Debtors 13,497 2,689 231 Cash at bank and in hand 245 140 132 _______ _______ _______ 13,742 2,829 363 Creditors : amount falling due within one year (27,017) (15,143) (11,764) _______ _______ _______ Net current liabilities (13,275) (12,314) (11,401) _______ _______ _______ Total assets less current liabilities 83,399 94,239 93,412 Provisions for liabilities and charges (106) (591) (220) _______ _______ _______ Total net assets 83,293 93,648 93,192 ===== ===== ===== Capital and reserves Called up share capital 2,268 2,540 2,540 Capital redemption reserve 874 602 602 Capital reserve 84,919 95,153 94,753 Revenue reserve (4,768) (4,647) (4,703) _______ _______ _______ Shareholders' funds 83,293 93,648 93,192 ===== === ===== == Net asset value per share (note 4) 958.3p 921.8p 917.3p CASH FLOW STATEMENT (Unaudited) (Unaudited) (Audited) 30th June 2007 30th June 2006 31st December 2006 £'000 £'000 £'000 Net cash outflow from operating activities (1,195) (1,738) (2,019) Net cash outflow from returns on investments and servicing of finance (329) (229) (530) Net cash inflow/(outflow) from capital expenditure and financial investment 4,916 (8,909) (7,565) Net cash outflow / (inflow) from financing (3,521) 10,430 9,068 _______ ______ ______ Decrease in cash for the period (129) (446) (1,046) ===== ==== ==== Notes to the Accounts for the six months ended 30th June 2007 1. Financial Statements The information contained within the financial statements in this half-yearly report has not been audited or reviewed by the Company's auditors. The figures and financial information for the year ended 31st December 2006 are extracted from the latest published accounts of the Company and do not constitute statutory accounts for that year. Those accounts have been delivered to the Registrar of Companies and included the report of the auditors which was unqualified and did not contain a statement under either section 237(2) or 237 (3) of the Companies act 1985. 2. Accounting policies The accounts have been prepared in accordance with United Kingdom Generally accepted Accounting Practice ('UK GAAP') and with the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies' dated 31st December 2005. All of the Company's operations are of a continuing nature. The accounting policies applied to these interim accounts are consistent with those applied in the accounts for the year ended 31st December 2006. 3. (Loss)/return per share (Unaudited) (Unaudited) (Audited) Six months Six months Year ended ended ended 30th June2007 30th June 2006 31st December 2006 £'000 £'000 £'000 (Loss)/Return per share is based on the following: Revenue loss (65) (96) (152) Capital return/(loss) 2,893 (2,284) (2,684) _______ ______ ______ Total return/(loss) 2,828 (2,380) (2,836) ====== ====== ===== Weighted average number of shares in issue 9,657,538 10,159,480 10,159,480 Revenue loss per share (0.67)p (0.94)p (1.49)p Capital return/(loss) per share 29.96p (22.48)p (26.42)p _______ ______ ______ Total return/(loss) per share 29.29p (23.42)p (27.91)p ====== ====== ===== 4. Net asset value per share Net asset value per share is based on the net assets attributable to the ordinary shareholders of £83,293,000 (30th June 2006: £93,648,000 and 31st December 2006: £93,192,000) and on the 8,691,480 (30th June 2006: 10,159,480 and 31st December 2006: 10,159,480) shares in issue at the period end, excluding shares held in treasury. JPMORGAN ASSET MANAGEMENT (UK) LIMITED 20th September 2007 This information is provided by RNS The company news service from the London Stock Exchange

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