Final Results

RNS Number : 2805A

JPMorgan Claverhouse IT PLC

18 March 2013

 



LONDON STOCK EXCHANGE ANNOUNCEMENT

JPMORGAN CLAVERHOUSE INVESTMENT TRUST PLC

FINAL RESULTS FOR THE YEAR ENDED 31ST DECEMBER 2012

18th March 2013

The Directors of JPMorgan Claverhouse Investment Trust plc announce the Company's results for the year ended 31st December 2012.

Chairman's Statement

Performance and Manager Review

The year to 31st December 2012 was considerably more positive for equity markets and for the Company.  Following a disappointing relative performance in 2011, I am pleased to report both a positive result and Net Asset Value ('NAV') per share out-performance relative to its benchmark, the FTSE All-Share Index. The total return on net assets was +13.7%, compared with the total return on the benchmark of +12.3% for the year. In their report, the Investment Managers provide a review of the market and portfolio performance.

During the year the share price rose from 416p to 437p.  The total return to shareholders underperformed the benchmark at +9.6%, as the discount (with debt at par) of the share price to NAV widened over the course of the year from 7.1% to 10.7%. 

The Board is encouraged by the improvement in relative performance following the detailed review undertaken in 2012 and the resultant changes that were made to the investment process and the investment management team with effect from 1st March 2012.  Fuller details are set out in my Statement of a year ago and in the 2012 half-year Statement.  Since March 2012 the portfolio has been managed on a much more fundamental basis with fewer stocks in the portfolio and concentrating on shares in those companies about which the team of William Meadon and Sarah Emly of our Manager, J. P. Morgan Asset Management ('JPMAM'), have real conviction.  It is early days yet for the new arrangements and we are all mindful that the improved performance needs to be sustained over the coming months and years in order to restore the Company's longer term performance record.

Shareholders will recall that the Board decided that the Company should move from the UK Growth sector to the UK Growth & Income sector with the shares, at that time, yielding in excess of 4%.  I am pleased to report that since that move the Company has more than held its own within that sector and that out-performance of the benchmark has continued since the year-end.  With now some 62 stocks in the Company's portfolio it is inevitable that there will be some ebb and flow in performance.  However, so far the change in approach agreed between the Board and JPMAM a year ago has got off to a good start and I look forward to that being fully reflected in a narrowing of the discount to NAV at which the Company's shares trade. 

Revenue and Dividends

In 2012 the revenue per share increased by 7.3% to 17.95p per share. The Board decided that the total dividend for the year should be increased from 18.25p to 18.85p, an above-inflation rise of 3.3%, thus increasing the total dividend for the 40th successive year.  The Board remains of the opinion that it is appropriate to draw on the revenue reserve, albeit at a reduced rate, which has been built up over a number of years in order to maintain its progressive dividend policy. 

The Board recognises the importance of quarterly dividends to our many individual shareholders, particularly when interest rates on cash savings have remained so low. A considerable disparity has developed between the larger fourth quarterly dividend and the smaller ones in each of the first three quarters.  The Board has resolved to re-balance the payments in order to reduce this disparity and will be increasing the dividend payable in each of the first three quarters. This will result in a reduction in the fourth quarter's dividend although, taking the four quarters together, it is expected that the total dividends in respect of 2013 will at least equal those in respect of 2012. It remains the Board's aim to increase the dividend each year and, taking a run of years together, we continue to aspire to deliver increases in dividends that will at least match the rate of inflation.

Gearing

The Company ended the year approximately 15% geared. During the year the gearing varied between 7% and 15%.  Gearing existed by way of a combination of the £30 million 7% 2020 Debenture and short term bank borrowings at a floating rate.  Since the year-end the Board has agreed with the Investment Managers that gearing of 10% will be considered as "normal" and that the Investment Managers will have discretion to vary the level of gearing in a range of +/- 7.5% around that normal level.  Should they recommend moving outside of that range they will seek the Board's prior consent.  However, the Company's overall policy remains to operate within the limits of a gearing range of 5% net cash to 20% geared in normal market conditions.

During the year the Company operated with a short term loan facility of £15 million.  Since the year-end this has been increased to £30 million of which at the date of this report £25 million was drawn and approximately £21 million invested which, together with the £30 million Debenture, delivers a gearing level of 16.5%.

Since the year-end the Board has agreed to the Investment Managers' request for permission to use Index Futures as a tool with which to manage the level of exposure to the market, and thus the level of gearing.  The use of Futures will obviate the need to sell stocks and will have less of an effect on the Company's income account than would significant variations in the level of conventional debt.  Futures will only be used for hedging for portfolio management purposes and no consent has been sought, nor given, for the speculative use of Futures.

Share Repurchases

During the year the Company repurchased 10,000 shares at a discount to NAV (with debt at par value) of 8.2%. Shares repurchased are all held in Treasury for possible re-issue, should the Company's shares move to a premium to NAV. The Board's objective remains to use the share repurchase authority to assist in managing any imbalance between supply and demand for the Company's shares, thereby reducing the volatility of the discount. Shares held in Treasury will only be re-issued at a premium to NAV unless shareholders were to grant authority for them to be re-issued at less than NAV. No such authority exists currently and the Board does not intend to seek such authority at the present time.

Should it not prove possible to re-issue shares held in Treasury at a premium to NAV then a sufficient number of shares so held will be cancelled so as to keep the Treasury holding within 5% of the issued share capital.  At the year-end 3.6% of issued capital was held in Treasury.

Board of Directors

Directors conduct an assessment of their performance each year and this is followed up by a conversation with me as Chairman. My own performance is assessed by the Senior Independent Director after he has consulted with all other Directors. A report is made to the Nomination Committee which meets annually to evaluate the performance of the Board, its Committees and the individual Directors. I became Chairman of the Company in April 2005. In my absence, the members of the Nomination Committee considered my service and confirmed that they recommend that I should continue as Chairman for the time being, notwithstanding my length of service.

As I reported last year, I am very aware that a number of Directors, including myself, have served for quite a number of years. In the light of the changes in the investment process agreed in 2012, the Board was of the view that stability of the membership of the Board was important at that time.  However, I also indicated that we expected to appoint a new director within the 12 months.  Following a search undertaken by external recruitment consultants, and as already announced on 5th March, I am very pleased that Andrew Sutch will be appointed to the Board with effect from 1st April 2013.  Andrew is a partner of Stephenson Harwood, solicitors, having recently retired as Senior Partner after 10 years in that post.  He is a director of Jupiter European Opportunities Trust plc and in his professional practice he has advised a number of investment trusts and management companies.  He brings considerable experience of our industry to the Claverhouse Board.  As with all Directors he will stand for reappointment at the forthcoming AGM and I look forward to introducing Andrew to shareholders on that day.

Anne McMeehan was appointed to the Board in 2006 and will stand down at the conclusion of this year's AGM.  On behalf of the Board, I would like to thank Anne for her commitment and the contribution she has made, particularly with respect to her detailed knowledge of the sales, marketing and distribution aspects of the financial arena.

Annual General Meeting

This year's AGM will be held at Trinity House, Tower Hill, London EC3N 4DH on Thursday, 25th April 2013 at 12.00 noon.

The Future

The Company is operating in a changing environment.  The Retail Distribution Review, which came into force on 31st December 2012, provides opportunities to widen the ownership of investment trusts.  The European Union's Alternative Investment Fund Managers Directive ('AIFMD') will affect the Company in ways that, despite its long gestation, are still impossible to spell out in detail.  What I do know is that the AIFMD will increase the costs of running the Company without, in my opinion, providing any increased benefits for shareholders.  Closer to home, the Financial Conduct Authority ('FCA') is due to replace the Financial Services Authority as the regulator of investment businesses and although the Company will not be directly regulated by the FCA, every business providing investment advice will.  The Chief Executive of the FCA, Martin Wheatley, has made it clear that his focus will be to ensure that shareholders' interests are paramount, which is encouraging.

Meanwhile we continue to live in unprecedented times in financial markets.  Interest rates in most of the developed world remain at almost unbelievably low levels and look set to remain there for the foreseeable future.  Indeed the US Federal Reserve has made an explicit statement to that effect and other central banks could well follow suit.  Yet growth in developed markets is very sluggish at best, with banks reluctant to lend and governments continuing to seek to restore public finances by reducing deficits.

I have to admit to doubt as to whether financial health can be restored in some countries through austerity before electorates develop "austerity fatigue".  This is a particularly acute problem for some of the countries in the Eurozone and despite the relative calm in debt markets since the summer of 2011, little fundamental adjustment has been achieved and there remains an ever present risk of a further outbreak of instability.  Whilst the United Kingdom is not directly involved in the Eurozone, it and UK companies operating in Europe would be seriously affected should one or more countries leave the Eurozone.  The political elite in Europe say that such an event is impossible and I do not doubt their determination to try to prevent it.  However, for there to be confidence in the Euro becoming a sound currency difficult political decisions lie ahead. Nevertheless, the mechanism by which those decisions can be taken in mature democracies is, in many instances, elusive unless governments are pressed by markets.  Politicians are frequently deterred from taking decisive action by fear of the reaction of their electorates as demonstrated by the statement by Jean-Claude Juncker, former Prime Minister of Luxembourg and until recently President of the Eurogroup.  In 2007 he was reported as saying "We all know what to do, but we don't know how to get re-elected once we have done it".  It seems to me that little has changed.

Despite these uncertainties, stock markets have started 2013 positively and the Company's share price has risen to over 500p.  Shareholders will be aware that many companies listed in London have global exposure. Many of those companies are in robust financial health having rebuilt balance sheets since 2008/9 and indeed many companies hold large cash balances.  Dividends seem generally to be well underpinned and despite the rise in share prices over recent months, shares still offer a yield at a time when bank deposits do not.  Deflation is no longer mentioned as a risk but rather some commentators fear that inflation may yet again become embedded in some economies.  Although there are enormous uncertainties as to how the economic future will unfold it remains my view that shares in well managed and well financed companies are a more likely store of value than many other assets, particularly bonds. Claverhouse will remain positioned as a core equity investment vehicle invested in such companies with London listings, albeit in many cases, global businesses.

Michael Bunbury

Chairman

15th March 2013

Investment Managers' Report

Market Review

Whilst 2012 was another weak year for the UK economy, it was a positive year for investors in UK equities, with the FTSE All Share Index producing an impressive +12.3% return. Mid and small cap stocks were particularly strong with the FTSE 250 and FTSE Small Cap indices both returning more than 25%.

The year started well for world markets, in anticipation that central banks' policies would support global growth. However, investor sentiment reversed in the spring and early summer as the Eurozone debt crisis reasserted itself. Greece experienced political turmoil as it tried to meet tough bailout conditions set by its creditors and for a while it seemed that the country would either elect to leave the Eurozone or be thrown out.

With the Eurozone crisis sapping confidence, global growth began to suffer. In the UK, optimism over an economic rebound dissolved as first-quarter gross domestic product came in at -0.2%, the second successive negative reading, signalling that the economy had fallen back into recession.

In late summer, though, the flames of the Eurozone crisis were doused by strong action from the European Central Bank ('ECB'), and investor sentiment began to recover. The turning point came in late July, when the ECB president Mario Draghi said he would 'do whatever it takes' to preserve the Euro. This was followed in September with the announcement of the ECB's outright monetary transactions programme, which allows the central bank to intervene at the short end of Eurozone sovereign bond markets if countries formally request assistance and agree to meet certain conditions.

As the year progressed, investors were further encouraged by a pick-up in US economic data. Housing data improved and employment data stabilised, while investors also welcomed additional policy stimulus from the US Federal Reserve, which in September committed itself to a third round of quantitative easing.

At home, meanwhile, the Bank of England increased the size of its asset purchase programme by £50 billion to £375 billion. Encouragingly, the UK economy moved out of recession in the third quarter of 2012 but a disappointing fourth quarter meant that the economy did not experience any real growth over the year.

Meanwhile, as the outlook for the global economy continued to improve and fears of a Eurozone break-up started to abate, previously risk-averse investors began to switch from the safety of the government bond markets into equities as they sought out higher yields to gain protection from inflation. The ten-year Gilt yield, which had fallen below 1.5% in late July, its lowest level since records began in 1703, climbed back towards 2% by the year end as confidence in the global economy improved and equity markets rallied.

Performance Review

In the year to 31st December 2012 the Company delivered a total return on net assets (capital plus dividends re-invested) of +13.7%, ahead of the benchmark FTSE All-Share Index, which delivered a total return of +12.3%. Although the first half of the year delivered modest returns, the second half of 2012 was much more encouraging, with the market rising by 8.7%. In the second half, the Company's gearing added to the outperformance generated by our stock selection.

In the underlying portfolio the most significant contributors to performance were a combination of those winning stocks in which we held significant overweight positions and underweight positions in companies that disappointed the market with profit warnings. One of our best performers was the low cost airline group, easyJet, where we held a significant position throughout the year. We favoured this company as it consistently delivered profit growth ahead of the market's expectations. Although its share price rose by 94% over the year, we believe that easyJet is still attractively valued and so it remains a major position in the portfolio.

Many of our financial stocks did well over the period, including the UK life insurer Legal & General, which not only performed well in share price terms (+42%), but delivered very strong dividend growth (+35%). Prudential, the UK and international life insurer with a strong presence in the growing economies of Asia, also performed well in share price terms (+36%). Another financial, Aberdeen Asset Management, continued to enjoy strong inflows into its products and consequently achieved strong profit growth, which was favourably recognised by investors.

As important as backing winners is avoiding losers and in this regard our underweight position in BG Group was beneficial. On 31st October 2012, BG announced a production warning for 2013 and consequently suffered significant downgrades to its forecast profits. Due to its expensive valuation the Company was significantly underweight in BG Group relative to the benchmark and benefited as a result. Being underweight in the major food retail group Tesco was also a positive contributor to performance as its share price fell substantially in light of its first profit warning for many years in early 2012. Avoiding poor performers is a key part of our approach and will continue to be an important potential source of added value.

Aggreko, the leading global temporary power provider, was our worst performing stock position over the year, as it suffered a profit warning in December 2012 and its share price fell significantly. The more subdued outlook for the company led to us selling out of the stock. Other detractors from performance included our positions in two of the utility stocks, Drax Group and Pennon Group. We had held both of these stocks for their attractive valuation characteristics. Drax underperformed in response to the Government's announcement in July 2012 in relation to the biomass conversion strategy, which was less helpful for Drax than had been anticipated and the share price fell in response to this. In the autumn, Pennon announced a disappointing trading update from its recycling business, Viridor, and its share price underperformed as a consequence. Despite these disappointing holdings, it was pleasing that our more focused approach to stock selection added value during the year.

Portfolio Review

Following the changes to the investment approach, effective 1st March 2012, the portfolio was restructured. The number of stocks was reduced, with greater conviction being shown in our favoured stocks and less tolerance shown towards stocks which did not satisfy our rigorous analysis. The portfolio is also now run typically at a yield premium to the FTSE All Share Index.

The increased risk appetite in the market saw us increase our exposure to the financial sector, buying Lloyds Banking Group whilst adding to our holdings in HSBC, Legal and General and Barclays. We also introduced two new holdings in asset managers, through purchases of Aberdeen Asset Management and Jupiter Fund Management, in anticipation of good profit growth from both higher market levels and new business from their clients.

Life in the retail sector is clearly very tough with the consumer suffering from the Government's austerity measures, including higher taxes. The move to on line retailers such as Amazon is also a major challenge. The year saw several high profile names (Jessops, JJB Sports and Comet) go into administration as they failed to cope with this brutal environment. However, there are significant opportunities for those retailers which can adapt their business model to these challenging times. One such retailer is Dixons which has both a credible high street and online presence and stands to benefit from the demise of one its major competitors, Comet. We believe that the valuation ascribed to the business by investors is too low and consequently we have taken a significant new holding in the company. Of other retailers, we remain positive about the prospects for Next and Sports Direct, both of which offer a compelling value proposition to the hard-pressed consumer.

Having held Berkeley Group, Barratt Developments and Bellway, some leading UK housebuilders, due to their valuation attractions, we retained our exposure to those stocks as the domestic housing market improved. Those companies delivered strong earnings growth in 2012 and their share prices performed well. We also introduced a new position in Taylor Wimpey which was trading at a significant discount to its book value and went on to deliver strong operating margins and returned to the dividend list in 2012.

In these rapidly changing times it is important that we do not fall in love with any of our holdings and should they become over-valued or lose their competitive advantage then we will not hesitate to sell them. The year saw us sell out of our holdings in Kingfisher, William Morrison and Tesco.

Being geared in the second half of the year added value. Our borrowing levels are determined by both our views on the prospects for markets and the number of attractive opportunities we can identify. In this regard the speech by Mario Draghi at the end of July committing to do 'whatever it takes' to save the Euro was key. Markets took the speech well and we increased the Company's gearing to take advantage of this change in sentiment. A high level of gearing was maintained through to the year end and indeed into the New Year in anticipation of the market continuing its advance.

Market Outlook

The UK macroeconomic environment will remain challenging in 2013, with growth likely to be around 1% - better than in 2012 but still less than half the UK's long-term growth rate. The Government's deep cuts in public spending and tax increases will continue to hurt consumer sentiment. Furthermore, although the crisis in the Eurozone (the UK's biggest trading partner) has abated, demand from Europe is still expected to be weak. Therefore export growth looks set to remain disappointing, although growth in the US and China should remain reasonably robust.

Despite the difficult economic back-drop, we remain positive on equities and continue to find a number of attractive opportunities. Monetary policy is very loose and getting looser as central bankers around the world are starting to prioritise growth over low inflation. Provided it does not lead to uncontrollable inflation, this action should be good for risk assets such as equities. Valuations are reasonable; in particular, the yield on many equities compared to 'safe' sovereign bonds is still very attractive. Moreover, equities provide the opportunity for income growth. Investors are still very cautiously positioned with equity holdings by institutions at multi-decade lows. A switch by investors from bonds back in to equities could push the market higher yet.

We believe that medium term investors who can bear some degree of volatility in the price of their investments will be rewarded by investing in a concentrated portfolio of reasonably valued, quality UK listed companies with improving prospects.

Adding value for shareholders is, and will remain, our principal objective.

William Meadon

Sarah Emly

Investment Managers                                                                                                              15th March 2013

Principal Risks

With the assistance of the Manager, 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 asset allocation or the level of gearing, may lead to underperformance against the Company's benchmark index and peer companies, resulting 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 by the Manager. 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 Managers, who attend all Board meetings, and reviews data which show statistical measures of the Company's risk profile. The Investment Managers employ the Company's gearing within a strategic range set by the Board. The Board holds a separate meeting devoted to strategy each year.

•   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.

•   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'). Were the Company to breach Section 1158, it might 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 and, since its shares are listed on the London Stock Exchange, the UKLA Listing Rules and Disclosure & 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 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 within the Annual Report.

•   Operational: disruption to, or failure of, JPMAM's accounting, dealing or payments systems or the custodian's records could 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 Risk Management and Internal Control section of the Corporate Governance report within the Annual Report.

•   Financial: the financial risks arising from the Company's financial instruments include market price risk, interest rate risk, liquidity risk and credit risk. Further details are disclosed in note 22 within the Annual Report.

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 includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces.

Michael Bunbury

Chairman

15th March 2013

Income Statement

for the year ended 31st December 2012

		2012			2011
		Revenue	Capital	Total	Revenue	Capital	Total
		£'000	£'000	£'000	£'000	£'000	£'000
Gains/(losses) on investments held at
fair value through profit or loss		-	25,990	25,990	-	(27,158)	(27,158)
Net foreign currency gains/(losses)		-	3	3	-	(3)	(3)
Income from investments		11,733	-	11,733	11,129	-	11,129
Other interest receivable and similar income		50	-	50	8	-	8
Gross return/(loss)		11,783	25,993	37,776	11,137	(27,161)	(16,024)
Management fee		(422)	(785)	(1,207)	(447)	(831)	(1,278)
Other administrative expenses		(700)	-	(700)	(643)	-	(643)
Net return/(loss) on ordinary activities
before  finance costs and taxation		10,661	25,208	35,869	10,047	(27,992)	(17,945)
Finance costs		(832)	(1,546)	(2,378)	(812)	(1,508)	(2,320)
Net return/(loss) on ordinary activities
before taxation		9,829	23,662	33,491	9,235	(29,500)	(20,265)
Taxation		(8)	-	(8)	(9)	-	(9)
Net return/(loss) on ordinary activities
after taxation		9,821	23,662	33,483	9,226	(29,500)	(20,274)
Return/(loss) per share		17.95p	43.24p	61.19p	16.73p	(53.50)p	(36.77)p
Dividends declared and payable in
respect of the year (note 3)		18.85p			18.25p
Dividends paid during the year (note 3)		18.25p			17.50p

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 2010	14,192	149,641	6,680	97,195	13,464	281,172
Repurchase of shares into Treasury	-	-	-	(2,821)	-	(2,821)
Net (loss)/return on ordinary activities	-	-	-	(29,500)	9,226	(20,274)
Dividends paid in the year	-	-	-	-	(9,659)	(9,659)
At 31st December 2011	14,192	149,641	6,680	64,874	13,031	248,418
Repurchase of shares into Treasury	-	-	-	(43)	-	(43)
Net return on ordinary activities	-	-	-	23,662	9,821	33,483
Dividends paid in the year	-	-	-	-	(9,987)	(9,987)
At 31st December 2012	14,192	149,641	6,680	88,493	12,865	271,871

Balance Sheet

at 31st December 2012

		2012	2011
		£'000	£'000
Fixed assets
Investments held at fair value through profit or loss		312,336	266,673
Investments in liquidity funds held at fair value through profit or loss		3,921	10,546
Total investments		316,257	277,219
Current assets
Debtors		1,009	1,474
Cash and short term deposits		99	259
		1,108	1,733
Creditors: amounts falling due within one year		(15,710)	(777)
Net current (liabilities)/assets		(14,602)	956
Total assets less current liabilities		301,655	278,175
Creditors: amounts falling due after more than one year		(29,784)	(29,757)
Net assets		271,871	248,418
Capital and reserves
Called up share capital		14,192	14,192
Share premium		149,641	149,641
Capital redemption reserve		6,680	6,680
Capital reserves		88,493	64,874
Revenue reserve		12,865	13,031
Total equity shareholders' funds		271,871	248,418
Net asset value per share (note 4)		496.8p	453.9p

The Company's registration number is 754577.

Cash Flow Statement

for the year ended 31st December 2012

		2012	2011
		£'000	£'000
Net cash inflow from operating activities		10,259	8,989
Returns on investments and servicing of finance
Interest paid		(2,343)	(2,287)
Taxation
Overseas tax recovered		2	4
Capital expenditure and financial investment
Purchases of investments		(165,726)	(192,304)
Sales of investments		152,735	198,452
Other capital charges		(6)	(6)
Net cash (outflow)/inflow from capital expenditure and financial investment		(12,997)	6,142
Dividends paid		(9,987)	(9,659)
Net cash (outflow)/inflow before financing		(15,066)	3,189
Financing
Bank loan drawn down		15,000	-
Repurchase of shares into Treasury		(97)	(3,134)
Net cash inflow/(outflow) from financing activity		14,903	(3,134)
(Decrease)/increase in cash and cash equivalents		(163)	55

Notes to the Accounts

for the year ended 31st December 2012

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 the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' (the 'SORP') issued by the AIC in January 2009. All of the Company's operations are of a continuing nature.

      The accounts have been prepared on a going concern basis.

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

2.   Return/(loss) per share

      The revenue return per ordinary share is based on the earnings attributable to the ordinary shares of £9,821,000 (2011: £9,226,000) and on the weighted average number of shares in issue during the year of 54,724,061 (2011: 55,140,654).

      The capital return/(loss) per ordinary share is based on the earnings attributable to the ordinary shares of £23,662,000 (2011: £29,500,000 loss) and on the weighted average number of shares in issue during the year of 54,724,061 (2011: 55,140,654).

      The total return/(loss) per ordinary share is based on the earnings attributable to the ordinary shares of £33,483,000 (2011: £20,274,000 loss) and on the weighted average number of shares in issue during the year of 54,724,061 (2011: 55,140,654).

3.   Dividends

      Dividends paid and declared

		2012	2011
		£'000	£'000
	Unclaimed dividends refunded to the Company1	-	(3)
	2011 fourth quarterly dividend of 7.75p (2010: 7.0p) paid in March 2012	4,242	3,876
	First quarterly dividend of 3.5p (2011: 3.5p) paid in June 2012	1,915	1,938
	Second quarterly dividend of 3.5p (2011: 3.5p) paid in September 2012	1,915	1,924
	Third quarterly dividend of 3.5p (2011: 3.5p) paid in December 2012	1,915	1,924
	Total dividend paid in the year of 18.25p (2011: 17.50p)	9,987	9,659

		2012	2011
		£'000	£'000
	Fourth quarterly dividend of 8.35p (2011: 7.75p) paid on 1st March 2013	4,569	4,242

      ¹Represents dividends which remain unclaimed after a period of 12 years and thereby become the property of the Company.

      The fourth quarterly dividend has been declared and paid in respect of the year ended 31st December 2012. In accordance with the accounting policy of the Company, this dividend will be reflected in the accounts for the year ending 31st December 2013.

4.   Net asset value per share

      Net asset value per share is based on the net assets attributable to the ordinary shareholders of £271,871,000 (2011: £248,418,000) and on the 54,723,979 (2011: 54,733,979) shares in issue at the year end, excluding shares held in Treasury.

5.   Status of announcement

2011 Financial Information

The figures and financial information for 2011 are extracted from the published Annual Report and Accounts for the year ended 31st December 2011 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.

2012 Financial Information

            The figures and financial information for 2012 are extracted from the Annual Report and Accounts for the year ended 31st December 2012 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

18th March 2013

For further information:

Jonathan Latter,

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.jpmclaverhouse.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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