Final Results

JPMorgan Fleming Mercantile IT PLC 06 April 2006 STOCK EXCHANGE ANNOUNCEMENT JPMORGAN FLEMING MERCANTILE INVESTMENT TRUST PLC PRELIMINARY ANNOUNCEMENT OF ANNUAL RESULTS The Directors of JPMorgan Fleming Mercantile Investment Trust plc announce the Company's results for the year ended 31st January 2006. Performance It was a positive year for small and mid sized stocks in the UK and I am very pleased to report another year of outperformance for the Company. The Company's total return on net assets (i.e. with net income reinvested) was +32.9%, which compares with a return of +28.8% on the same basis from the Company's benchmark index, the FTSE All-Share (excluding FTSE 100 constituents and investment trusts). The Company benefited from the Investment Managers' asset allocation and stock selection in the second half of 2005 and this was amplified by being geared in the rising market. The total return to shareholders was +38.8%, which reflected the narrowing during the year of the share price discount to net asset value from 14.5% to 9.3% (with debt at fair value). It is very pleasing to report that excluding gearing, the investment managers have now outperformed their benchmark index for six consecutive years. Earnings and Dividends Earnings per share increased by 19.3% for the year, from 18.27p to 21.79p. The Company has paid three interim dividends of 4.25p per ordinary share, and the Directors have declared a fourth quarterly dividend of 9.00p. This gives a total dividend of 21.75p for the year and represents an increase of approximately 10.1%. Board of Directors Charles Peel was appointed a Director on 1st October 2005. He was a founding director of Peel Hunt and Co. Limited and brings a wealth of experience to the Board. Having been appointed to the Board during the year, he will stand for election at the forthcoming AGM. The Directors retiring by rotation are Nicholas Berry and Simon Keswick. Both have been Directors for more than ten years and, in accordance with the Board's policy, must therefore stand for re-election annually. It is the intention of both Directors to stand down from the Board at the conclusion of the 2007 AGM. Share Repurchases At last year's Annual General Meeting shareholders gave the Directors authority to repurchase up to 14.99% of the Company's ordinary shares for cancellation. During the year, a total of 2,906,000 shares were repurchased for cancellation at a total cost of £26.8m (excluding the shares repurchased pursuant to the Britannic Smaller Companies transaction). Since the year end, a further 2,185,649 shares have been repurchased at a cost of £22.1m. The Board has recently taken a more active approach towards share repurchases in order to enhance the net asset value and minimise the absolute level and volatility of the discount on the Company's shares. To date the repurchases have added approximately 1.2 pence to the net asset value per share and the discount, with debt at fair value, has ranged between 12.1% and 8.5% in the period from 15th December 2005 to 4th April 2006. The Board is therefore proposing that the authority be renewed at the forthcoming Annual General Meeting, as it remains an effective mechanism by which to achieve the aims set out above. Manager and Management Fee The Board has reviewed the investment management, company secretarial and marketing services provided to the Company by JPMorgan Asset Management (UK) Limited ('JPMAM'). In the opinion of the Directors, the continuing appointment of JPMAM for the provision of these services is in the interests of shareholders as a whole. With effect from 1st February 2006, the basis on which the management fee is calculated has altered from 0.4 per cent. of the Company gross assets to 0.5 per cent. of the Company's market capitalisation. This change in the fee basis results in JPMAM being paid on the Company's market value and JPMAM is therefore incentivised to minimise the discount of the Company's share price to net asset value through various means, including marketing. As a consequence, the Company will no longer contribute towards JPMAM's marketing budget. The Board of Directors believe that this arrangement aligns more closely the interests of the Company, its shareholders and JPMAM. Annual General Meeting The Company's one hundred and twentieth Annual General Meeting will be held at Trinity House, Tower Hill, London EC3N 4DH on Wednesday 24th May 2006 at 12.00 noon. Outlook The Board believes that UK small and mid cap companies remain good value. With sustained strength from the UK economy, continuing corporate activity and the Investment Managers' consistent investment process, we are confident that the Company will continue to prosper. Hamish Leslie Melville Chairman 6th April 2006 For further information please contact: Jonathan Latter JPMorgan Asset Management (UK) Limited - Secretary JPMorgan Fleming Mercantile Investment Trust plc Unaudited figures for the year ended 31 January 2006 Income Statement (Unaudited) Year ended 31 January 2006 Year ended 31 January 2005 (Restated - see note 1) Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Realised gains on investments - 56,053 56,053 - 29,371 29,371 Unrealised gains on investments - 289,374 289,374 - 161,669 161,669 Currency losses on cash and short term deposits held during the year - (3) (3) - (49) (49) Other capital charges - (119) (119) - (17) (17) Income from investments 37,617 - 37,617 31,595 - 31,595 Other Income 2,282 - 2,282 3,375 - 3,375 _______ ________ _______ _______ ________ _______ Gross revenue and capital returns 39,899 345,305 385,204 34,970 190,974 225,944 Management fee (3,264) (3,264) (6,528) (2,817) (2,817) (5,634) Other administrative expenses (784) - (784) (702) - (702) _______ ________ _______ _______ ________ _______ Net return before finance costs and 35,851 342,041 377,892 31,451 188,157 219,608 taxation Finance costs (6,478) (6,478) (12,956) (6,631) (6,631) (13,262) _______ _______ _______ _______ _______ _______ Net return on ordinary activities before 29,373 335,563 364,936 24,820 181,526 206,346 taxation Taxation - - - - - - ______ _______ _______ ______ _______ _______ Net return attributable to ordinary 29,373 335,563 364,936 24,820 181,526 206,346 shareholders ______ _______ _______ ______ _______ _______ Return per ordinary share 21.79p 248.92p 270.71p 18.27p 133.65p 151.92p Dividends proposed in respect of the financial year ended 31st January 2006 total 21.75p per share (2005: 19.75p per share) costing £29,150,000 (2005: £26,617,000). JPMorgan Fleming Mercantile Investment Trust plc Unaudited figures for the year ended 31 January 2006 Reconciliation of Movements in Shareholders Funds (Unaudited) Called up Share Capital Capital Capital share premium redemption reserve - reserve - Revenue capital account reserve realised unrealised reserve Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 At 31st January 2004 (restated - see 33,957 4,361 2,170 742,261 145,103 41,577 969,429 note 1) Net capital return from ordinary - - - 80,008 101,518 - 181,526 activities Net revenue return from ordinary - - - - - 24,820 24,820 activities Dividends appropriated in the year - - - - - (31,242) (31,242) _______ _______ ________ _______ _______ _______ ________ At 31st January 2005 (restated - see 33,957 4,361 2,170 822,269 246,621 35,155 1,144,533 note 1) Adjustment from mid market to bid - - - - (7,938) (7,938) valuation Shares bought back and cancelled (1,477) - 1,477 (49,754) - - (49,754) Shares issued 643 19,098 - - - - 19,741 Net capital return from ordinary - - - 141,747 193,816 - 335,563 activities Net revenue return from ordinary - - - - - 29,373 29,373 activities Dividends appropriated in the year - - - - - (26,524) (26,524) _______ _______ ________ _______ _______ _______ ________ At 31st January 2006 33,123 23,459 3,647 914,262 432,499 38,004 1,444,994 JPMorgan Fleming Mercantile Investment Trust plc Unaudited figures for the year ended 31 January 2006 BALANCE SHEET 31 January 31 January 2006 2005 (Restated - see note 1) £'000 £'000 Investments at fair value 1,607,071 1,321,872 Net current assets/(liabilities) 14,440 (918) Creditors: amounts falling due after more than one year (176,517) (176,421) _______ _______ Total net assets 1,444,994 1,144,533 ========= ========= Net asset value per ordinary share 1,090.6p 842.6p CASH FLOW STATEMENT 2006 2005 £'000 £'000 Net cash inflow from operating activities 31,624 27,362 Net cash outflow from returns on investments and servicing of finance (13,071) (12,990) Net cash inflow/(outflow) from capital expenditure and financial investment 32,230 (64,928) Total equity dividends paid (26,524) (31,242) Net cash outflow from financing (58,533) - _______ _______ Decrease in cash for the year (34,274) (81,798) ========= ========= 1 The Company has adopted certain new accounting policies due to the issue of new financial reporting standards (FRSs). In accordance with FRS21, the fourth quarterly dividend is now brought into account in the year in which it is paid. The comparatives have been restated for this change in accounting policy and, as a result, total net assets have increased by £9,508,000. 2 The above financial information does not constitute statutory accounts as defined in Section 240 of the Companies Act 1985. The comparative financial information is based on data contained in the statutory accounts for the year ended 31st January 2005. These accounts, upon which the auditors issued an unqualified opinion, have been delivered to the Registrar of Companies. JPMORGAN ASSET MANAGEMENT (UK) LIMITED 6th April 2006 This information is provided by RNS The company news service from the London Stock Exchange

Companies

Mercantile Investment Trust (The) (MRC)
UK 100
FTSE quotes by TradingView

Latest directors dealings

All directors dealings today