Half-year Report

JPMorgan Claverhouse IT PLC

10 August 2023

 

LONDON STOCK EXCHANGE ANNOUNCEMENT

JPMORGAN CLAVERHOUSE INVESTMENT TRUST PLC

UNAUDITED HALF YEAR RESULTS FOR THE SIX MONTHS ENDED
30TH JUNE 2023

Legal Entity Identifier: 549300NFZYYFSCD52W53

Information disclosed in accordance with the DTR 4.2.2

The Directors of JPMorgan Claverhouse Investment Trust plc (the "Company") announce the Company's results for the half year ended 30th June 2023.

Chairman's Statement

Performance

Over the six months to 30th June 2023, the UK's economic outlook remained blighted by persistently high inflation, forcing the Bank of England to maintain its aggressive monetary tightening stance. The base rate rose from 3.5% at the end of December 2022, to 5.0% at the end of June 2023. This was further increased to 5.25% on 3rd August 2023.

This combination of stubbornly high inflation, interest rate hikes, and the associated risk of recession, was a drag on UK equity markets. Investor sentiment was dented further by industrial action across the public sector, as workers sought wage increases to counteract the rising cost of living. The Company's benchmark, the FTSE All Share Index, rose by just 2.6% over the first half of the year, underperforming global markets, where inflation pressures are easing more rapidly. For example, US CPI inflation has declined from its peak above 9% in mid-2021 to just 3% in May 2023. The UK market's lack of large technology stocks also detracted from relative performance, as these and other growth stocks have returned to favour with investors in recent months.

During the past six months, the Portfolio Managers made changes to the portfolio to reflect the various challenges generated by high inflation, rising interest rates, the associated cost-of-living crisis and the possibility that the UK will slip into recession later this year, as higher rates take effect. Specifically, the Portfolio Managers focused on companies with robust balance sheets, low debt levels, strong competitive positions and price power to pass on rising costs to end customers.

Despite these changes, the Company underperformed its benchmark over the period by 1.9% on a net asset value ('NAV') basis (with debt at par), and 6.9% in share price terms. While this underperformance is disappointing, it does reflect a market that has been driven by macro concerns and sentiment, rather than individual stock fundamentals, which are the Portfolio Managers' focus. The share price discount to NAV (with debt at fair) moved from a discount of 0.3% at the start of the period to a discount of 5.7% at 30th June 2023.

The Investment Manager's Report below provides more detail on performance during the period.

When assessing the Company's performance, shareholders should bear in mind that the Portfolio Managers invest for the long-term, so it is more meaningful to judge performance over a longer timeframe. On this basis, the Company continues to do well in absolute terms and remains ahead of its benchmark over the ten years to 30th June 2023.

As at 30th June 2023, the Company's NAV per share (with debt at par value) was 678.4p and the share price was 652.0p. Since the end of the period, the NAV has decreased to 674.78 and the share price has remained unchanged at the time of writing*.

*as at 8^th August 2023.

Revenue and Dividends

Revenue per share for the six months to 30th June 2023 was 15.80p, compared with 17.38p earned in the same period in 2022, but significantly higher than in the same period in 2021, reflecting the weak UK economy over the period. The Company declared a total dividend of 33.00p in respect of the financial year ended 31st December 2022. This dividend comprised three quarterly interim dividends of 7.50p and a fourth quarterly interim dividend of 10.50p. A first quarterly dividend of 8.00p per share in respect of the current financial year was paid on 13th June 2023. It remains the Board's intention that the first three quarterly dividends should be of equal size, and to this end, it has declared a second quarterly dividend of 8.00p per share to be paid on 1st September 2023 to shareholders on the register at the close of business on 28th July 2023.

The Company has increased its dividend for 50 successive years. The Board's dividend policy is to seek to increase the total dividend each year and, taking a run of years together, to increase dividends at a rate close to or above the rate of inflation. With UK inflation remaining stubbornly high, the Board will continue to monitor carefully the outlook for dividend income, and will take into account the Company's revenue reserves, which have accumulated over a number of years, and its ability, as an investment trust, to utilise these reserves if necessary to support the dividend.

Discount, Share Repurchases

Discounts generally in the investment trust sector have widened over the last 12 months with investors switching their equity exposure to fixed income and money market funds. The Company has not been immune to this trend, with the discount to NAV (with debt at fair value) widening to close on 30th June 2023 at 5.7%. During the period the discount touched on 6.8% as a result of selling from a significant shareholder, JPMorgan Elect plc, following that company's combination with JPMorgan Global Growth & Income plc. Since the period end the discount has narrowed and is currently 5.2%*.

*as at 8^th August 2023.

The Board's objective is to use its repurchase and allotment authorities to manage imbalances between the supply and demand of the Company's shares, with the intention of reducing the volatility of the discount or premium, in normal market conditions. Over the review period, the Board utilised the Company's buy back authority, buying a total of 785,935 shares, at a cost of £5.4 million.

Since the end of the period, the Company has bought back a total of 223,085 shares at a cost of £1.4 million at the time of writing*.

*as at 8^th August 2023.

Gearing/Long Term Borrowing

The Portfolio Managers can use FTSE 100 index futures to effect reductions in the level of gearing by reducing the portfolio's market exposure. The Company's gearing policy (excluding the effect of any futures) is to operate within a range of 5% net cash and 20% geared in normal market conditions. The Portfolio Managers have discretion to vary the gearing level between 5% net cash and 17.5% geared (including the effect of any futures). The Board believes that over the long-term, a moderate level of gearing is an efficient way to enhance shareholder returns.

Taking into account borrowings, net of cash balances held and the effect of futures, the Company ended the review period approximately 4.9% geared, compared to gearing of approximately 7.2% at the end of December 2022. The Company has a £30 million 3.22% private placement loan, maturing in March 2045 and a revolving credit facility with Mizuho Bank Limited, of which £30 million was drawn down as at 30th June 2023.

Investment Management Fees

During the period, the Board agreed with the Manager to reduce the Company's investment management fees. With effect from 1st July 2023, the investment management fee is charged on a tiered basis at an annual rate of 0.45% of the Company's net assets on the first £400 million and at 0.40% of net assets above that amount. This compares with the previous arrangement under which the management fee was charged at an annual rate of 0.55% on the first £400 million of Company assets and 0.40% thereafter. The fee will continue to be calculated and paid monthly.

Outlook

Good news has been scarce since our last report. The geopolitical and economic environment remains worrying, exacerbated by the weight of global governments' debt to be financed. The war in Ukraine drags on, with no prospect of resolution in sight, while China's post-lockdown economic rebound has disappointed expectations. At home, UK inflation has surprised on the upside although the latest inflation rate figures have shown improvement, while growth has been disappointingly weak. This is beginning to impact corporate margins, and profits are likely to decline this year. The recent interest rate rises have increased the risk of recession, as higher rates begin to bite and mortgage holders and others struggle to meet their monthly repayment commitments. There are also concerns by some that the current widespread industrial action will fuel a wage/price spiral that may see the UK revisit the stagflation of the 1970s. The government's finances are also weak, due in part to generous support packages implemented during the pandemic and more recently in initiatives to help households cope with sharply higher energy prices. This means that there is currently limited scope for the government to implement fiscal stimulus measures to boost activity.

However, looking beyond the gloomy near-term macroeconomic outlook, there are still encouraging reasons to be positive about the longer-term prospects of UK equities, and of the Company. As the Portfolio Managers observe in their report on the following pages, much of the bad news is now discounted by the market, and UK equity valuations are still extremely attractive in absolute terms and relative to other markets. This represents a rare opportunity for investors to enter this market at historically low valuations and suggests there is scope for significant market gains, as and when the economic backdrop improves, and investors once again focus on long-term fundamentals.

In the meantime, we believe the Portfolio Managers' current prudent, long-term investment approach remains appropriate for these challenging times. The Company's diversified portfolio comprises mainly large, high-quality, FTSE 100 stocks which have been selected for their strong balance sheets, capacity to grow significantly over the medium term and their pricing power, which allows them to pass on higher input costs to end customers - an especially valuable attribute in the current inflationary environment.

In sum, we believe the portfolio represents a balanced mix of quality companies, which leaves the Company well-positioned to continue delivering steady and consistent returns and a growing income, over the long-term.

Task Force on Climate-related Financial Disclosures

The Investment Manager published its first UK Task Force on Climate-related Financial Disclosures Report for the Company in respect of the year ended 31st December 2022 on 30th June 2023. The report discloses the portfolio's climate-related risks and opportunities according to the Financial Conduct Authority Environmental, Social and Governance Sourcebook and the Task Force on Climate-related Financial Disclosures Recommendations. The report is available on the Company's website: here

This is the first report under the new guidelines and disclosure requirements and the Board will continue to monitor as these reports evolve.

Keeping in Touch

The Board and the Portfolio Managers are keen to increase dialogue with the Company's shareholders and other interested parties. If you wish to sign up to receive email updates from the Company, including news and views and latest performance statistics, please click here

The Board appreciates the ongoing support of its shareholders.

David Fletcher

Chairman                                                                                                                9th August 2023

INVESTMENT MANAGER'S REPORT

Investment Approach

We aim to construct a diversified portfolio of our best ideas, comprising quality, growth and value stocks. For the patient investor, such an approach will, we believe, over a run of years produce outperformance of the index in a steady, risk-controlled manner irrespective of market conditions. We also strive to maintain Claverhouse's enviable dividend record by biasing the portfolio towards attractive dividend stocks.

Market Review

UK equities lagged well behind global equities over the six months ended 30th June 2023. The absence of (now back in favour with investors) large technology stocks, together with stubbornly high inflation, detracted from the UK's appeal.

Despite a further fall in oil and gas prices, UK inflation continued to disappoint with the May CPI printing at 8.7%, and Core inflation showing another worrying rise from 6.8% to 7.1% - the highest since 1992. The Bank of England responded by raising short rates for the 13th consecutive month, to 5.0% at the end of June 2023. The pound rallied to finish the period at $1.27, the highest level in twelve months. In the spring, markets wobbled on the rapid collapse of Credit Suisse and the collapse of the West coast, American bank, Silicon Valley Bank (SVB). But investors soon took the view that another systemic banking crisis was unlikely.

Political turmoil was a feature of the period. In the UK, former Prime Minister Boris Johnson stood down as a member of Parliament (MP) in disgrace, following a report that found he deliberately misled MPs over lockdown parties in Downing Street. In the US, Donald Trump became the first former president to face criminal charges after a New York court indicted him on 34 counts of falsifying business records. France was plagued by a series of widespread, violent riots triggered by a police shooting.

The Ukraine war remained locked in a bloody stalemate. Wagner, a mercenary army supporting Russia's war effort, threatened to march on Moscow to challenge Russia's military leaders, but soon backed down, with its leader seemingly retreating to exile in Belarus.

At the end of the period, the mood amongst investors was fragile. A combination of UK high inflation and continuing industrial unrest led some commentators to draw parallels with the country's economic woes of the 1970s.

By the end of June, the total return on the FTSE All-Share index from the start of the year was +2.5%.

Portfolio review

The portfolio struggled to make absolute or relative headway during the period. The magnitude of the current economic and geo-political challenges dampened investors' enthusiasm for many attractively valued, good quality UK companies. Glencore and Watches of Switzerland were two such examples of companies in the portfolio which we believe were under-appreciated by the market over the past six months.

The principal transactions we undertook during the period are detailed below.

Purchases

The global travel industry was absolutely decimated by the pandemic. However, companies that are well capitalised, like Premier Inn owner Whitbread, and packaged holiday provider JET2, are now well placed to take advantage of the resultant supply shortage. Surging demand has led to a very favourable pricing environment for airlines and hotels which we expect to continue, especially in the budget part of the market where these two companies operate, as consumers become more price sensitive.

Georgia has benefitted from a huge influx of affluent Ukrainians and Russians fleeing the war. This has led to a surge in the Georgian economy and a thriving banking sector as deposits have grown. Bank of Georgia and TBC Bank operate a duopoly in this market, which lends itself to very favourable economics for both banks. As a result, both earn returns on equity of between 20-30% and have consistently created value for shareholders. Their balance sheets are in strong positions, with core equity tier 1 ratios in the high teens, which should allow them to continue to return substantial capital to shareholders. Both positions were bought at under 5x PE.

Another bank we added to the portfolio was Standard Chartered as it traded at around 50% of its book value, a level at which we viewed as good value. In addition, around 80% of Standard Chartered's operating income is generated in Asia, which is benefitting from China's reopening.

We added Flutter, a market leader in the rapidly expanding US gambling market following regulatory reforms. We decided to initiate with a relatively small position as results have positively surprised even versus the market's high expectations.

We also topped up several existing positions which are continuing to deliver operationally. For example, Centrica is benefitting from the benign competitive environment for British Gas, after many of its competitors went bust in 2022, while the high volatility in energy prices is a prime environment for Centrica's energy trading division.

Ashtead is an equipment rental business which looks extremely well placed to capitalise on the wave of the so called 'mega-projects' which are taking place in the US to facilitate, among other themes, onshoring and the energy transition. 3i Group announced that its portfolio company, discount retailer Action, continues to take market share as price sensitive consumers look for cheaper places to shop. Historically this sort of environment has been ideal for discounters, and customers have been surprisingly loyal once the backdrop improves.

Sales

Barclays has had significant issues with internal controls in recent years, so it was the obvious name to reduce as we looked to reduce our bank exposure following the failure of SVB. We also sold out of the asset manager M&G, as we reduced our broader financial exposure in response to rising interest rates.

Bunzl is a distributor of single use products, which can pass through all cost inflation to its end customers, which leaves it well placed in the current inflationary environment. However, price deflation would be a significant headwind for earnings and the stock is trading at close to peak multiples, so we decided to exit our holding in response to evidence that inflation may have peaked.

We exited UK water company Severn Trent as we continue to prefer utility companies, such as SSE, which have greater exposure to the energy transition.

We sold some small holdings in UK domestic companies which we suspect may struggle in the face of a weakening UK economy, including Morgan Sindall, a construction and regeneration company, and homebuilders Crest Nicholson, and Redrow.

The government outsourcer, Serco, is undergoing a period of change after the departure of its CEO. The Company's new management team is relatively untested and faces some large contract renegotiations in its first year, so we thought it prudent to sell the stock.

Serica, an oil and gas explorer and producer, announced a large acquisition of another oil & gas E&P which called into question the capital discipline of the management team. So, after collecting the quarterly dividend, we sold the stock.

Performance Review: six months to 30th June 2023 - Stock Attribution (actives ex-futures)

		Average
Top 5 Stocks		Active %		Attribution %	Explanation
3i Group		+2.6		+0.98	The European retailer, Action (3i's largest holding) continued to post excellent results on the back of improving market share and the continuing roll out of new stores.
Centrica		+1.0		+0.3	Supernormal profits in its energy trading division have transformed Centrica's balance sheet. Furthermore, a more benign competitive environment for British Gas is also proving beneficial.
Ashtead		+1.4		+0.20	The backlog of large US infrastructure projects provides a strong tailwind for this equipment rental business.
BAE		+1.4		+0.19	The valuation gap vs the global defence peers closed as BAE's results continued to impress. Future growth seems well underpinned.
SSE		+2.5		+0.18	SSE has an essential role in the transition to renewable energy through its development and ownership of assets which are integral to the UK's energy infrastructure.
	Average
Bottom 5 stocks	Active %		Attribution %			Explanation
Glencore	+2.1		-0.44			This strong, diversified global mining company benefited significantly from last year's surge in coal prices, but underperformed over the period on the back of a weakening coal price.
Watches of	+0.9		-0.29			A perception of a weaker growth outlook in
Switzerland						America for this retailer of luxury watches led to its shares de-rating.
Flutter	-0.9		-0.29			Shares in this international gambling company
Entertainment						outperformed as they continued to deliver better than expected results in the US.
Telecom Plus	+1.3		-0.28			Despite the continued strong results and improved competitive landscape, the shares of this utility were surprisingly weak.
Rolls-Royce	-0.5		-0.20			After several lacklustre years, full year results at this aerospace engine manufacturer showed some improvement.

Top Over and Under-weight positions vs FTSE All-Share Index

Top Five Overweight Positions		Top Five Underweight Positions
3i Group	+2.8%	Barclays	-1.1%
SSE	+2.7%	National Grid	-1.1%
BP	+1.8%	Reckitt Benckiser	-1.1%
JD Sports	+1.7%	Flutter Entertainment	-0.9%
Glencore	+1.7%	Unilever	-0.9%

Source: JPMAM, as at 30th June 2023.

Market Outlook

The global economy continues to face a number of significant challenges: worryingly high inflation, rapidly rising interest rates and an ongoing and brutal war on the edge of Europe, to name just three.

In the UK, the spectre of stagflation looms large. Economic growth remains anaemic and stubbornly high inflation had led to 13 consecutive monthly increases in base rates to 5.0% (from a low of 0.1%). The market is expecting rates to keep rising until next spring, peaking at an eye-watering 6.5%. At least savers will receive some comfort from rising rates on their deposits.

Whilst the overwhelming majority of mortgages are on fixed terms, there is nevertheless considerable pain to come for borrowers: roughly 35,000 mortgages are coming to the end of their term each week, the vast majority of them paying below 2.5% per annum. Current fixed two-year mortgage rates are 6.5% and rising.

Nor is the UK government immune from the impact of higher rates: with the national debt now in excess of 100% of GDP (for the first time since 1961), government annual interest payments of circa £100 billion per annum. are set to rise further still. With an election quite likely next year, it is difficult to see how the government can afford any pre-election tax cuts - quite the reverse, in fact.

Having for a long time insisted that inflationary pressures were 'transitory', the very credibility of the Bank of England is now in question. The rapid growth in wages (and continuing industrial unrest) suggests that the public thinks that inflation will stay higher for longer than previously forecast and are fighting to protect their own interest. Moreover, the government's strategy for growth is also under scrutiny, not just from opposition parties but increasingly from those on its own side.

Whilst recognising that UK equities have priced in a lot of this bad news, until we see some marked abatement of the current significant economic and geo-political woes, it is quite possible that many UK investments will remain lowly-rated. Our portfolio is geared, reflecting the range of attractive stock opportunities that we see; however, it is predominantly in liquid large caps that give us greater flexibility to deal with macro uncertainty. Meanwhile, we trust that shareholders will appreciate the attractive dividends which your Company continues to pay, confident that in time such anomalous value will be realised.

At the time of writing, the Company is 6.5% geared, with an overweighting to international FTSE 100 'blue chip' stocks.

For and on behalf of the Investment Manager

William Meadon

Callum Abbot

Portfolio Managers                                                                                               9th August 2023

Interim Management Report

The Company is required to make the following disclosures in its half yearly report.

Principal Risks and Uncertainties

The Board has an ongoing process for identifying, evaluating and managing the principal risks, emerging risks and uncertainties of the Company. The principal risks and uncertainties faced by the Company fall into the following broad categories: cybercrime; geopolitical and macro-economic; share price volatility; investment and strategy; market factors such as interest rates, inflation and equity market performance; operational; loss of investment team; strategy and performance; climate change; legal and regulatory/corporate governance; and financial. Detailed information on each of these areas is given in the Strategic Report within the Annual Report and Accounts for the year ended 31st December 2022.

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, liquidity and 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 operational existence for at least 12 months from the date of the approval of this half yearly report. In reaching that view, the Board has considered the impact of heightened market volatility since the Russian invasion of Ukraine, the inflationary environment and other geopolitical and financial risks. However, it does not believe the Company's going concern status is affected. For these reasons, the Board considers that there is sufficient evidence to continue to adopt the going concern basis in preparing the financial statements.

Statement of Directors' Responsibilities

The Board of Directors of the Company, who are listed in the Company information section, confirms that, to the best of its knowledge:

(i)    the condensed set of financial statements contained within the half year financial report has been prepared in accordance with FRS 104 'Interim Financial Reporting' 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 2023 as required by the Disclosure Guidance 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 Disclosure Guidance 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.

The half yearly financial report for the six-month period to 30th June 2023 has not been audited or reviewed by the Company's Auditor.

For and on behalf of the Board

David Fletcher

Chairman                                                                                                       9th August 2023

CONDENSED STATEMENT OF COMPREHENSIVE INCOME

For the six months ended 30th June 2023

	(Unaudited)				(Unaudited)			(Audited)
	Six months ended				Six months ended			Year ended
	30th June 2023				30th June 2022			31st December 2022
	Revenue	Capital	Total	Revenue		Capital	Total	Revenue	Capital	Total
	£'000	£'000	£'000	£'000		£'000	£'000	£'000	£'000	£'000
Losses on investments held
at fair value through
profit or loss	-	(4,658)	(4,658)	-		(68,379)	(68,379)	-	(53,403)	(53,403)
Net foreign currency gains	-	4	4	-		275	275	-	285	285
Income from investments	10,358	-	10,358	11,393		-	11,393	22,346	-	22,346
Interest receivable and
similar income	291	-	291	90		-	90	339	-	339
Gross return/(loss)	10,649	(4,654)	5,995	11,483		(68,104)	(56,621)	22,685	(53,118)	(30,433)
Management fee	(389)	(723)	(1,112)	(403)		(749)	(1,152)	(778)	(1,444)	(2,222)
Other administrative expenses	(423)	-	(423)	(385)		-	(385)	(716)	-	(716)
Net return/(loss) before
finance costs and taxation	9,837	(5,377)	4,460	10,695		(68,853)	(58,158)	21,191	(54,562)	(33,371)
Finance costs	(376)	(699)	(1,075)	(298)		(555)	(853)	(658)	(1,222)	(1,880)
Net return/(loss) before
taxation	9,461	(6,076)	3,385	10,397		(69,408)	(59,011)	20,533	(55,784)	(35,251)
Taxation	(8)	-	(8)	1		-	1	3	-	3
Net return/(loss) after
taxation	9,453	(6,076)	3,377	10,398		(69,408)	(59,010)	20,536	(55,784)	(35,248)
Return/(loss) per share
(note 3)	15.80p	(10.16)p	5.64p	17.38p		(115.99)p	(98.61)p	34.27p	(93.10)p	(58.83)p

All revenue and capital items in the above statement derive from continuing operations.

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 net return/(loss) after taxation represents the profit/(loss) for the period/year and also the total comprehensive income for

the period/year.

CONDENSED STATEMENT OF CHANGES IN EQUITY

	Called up		Capital
	share	Share	redemption	Capital	Revenue
	capital	premium	reserve	reserves1	reserve1	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Six months ended 30th June 2023 (Unaudited)
At 31st December 2022	15,037	176,867	6,680	194,276	22,940	415,800
Repurchase of shares into Treasury	-	-	-	(5,375)	-	(5,375)
Net (loss)/return	-	-	-	(6,076)	9,453	3,377
Dividends paid in the period (note 4)	-	-	-	-	(11,083)	(11,083)
At 30th June 2023	15,037	176,867	6,680	182,825	21,310	402,719
Six months ended 30th June 2022 (Unaudited)
At 31st December 2021	14,859	171,863	6,680	250,060	21,560	465,022
Issue of Ordinary shares	130	3,713	-	-	-	3,843
Net (loss)/return	-	-	-	(69,408)	10,398	(59,010)
Dividends paid in the period (note 4)	-	-	-	-	(10,162)	(10,162)
At 30th June 2022	14,989	175,576	6,680	180,652	21,796	399,693
Year ended 31st December 2022 (Audited)
At 31st December 2021	14,859	171,863	6,680	250,060	21,560	465,022
Issue of ordinary shares	178	5,004	-	-	-	5,182
Net (loss)/return	-	-	-	(55,784)	20,536	(35,248)
Dividends paid in the year (note 4)	-	-	-	-	(19,156)	(19,156)
At 31st December 2022	15,037	176,867	6,680	194,276	22,940	415,800

1        This reserve forms the distributable reserve of the Company and may be used to fund distributions to investors.

CONDENSED STATEMENT OF FINANCIAL POSITION

At 30th June 2023

	(Unaudited)	(Unaudited)	(Audited)
	At 30th June 2023	At 30th June 2022	At 31st December 2022
	£'000	£'000	£'000
Fixed assets
Investments held at fair value through profit or loss	443,181	427,465	445,552
Current assets
Derivative financial assets	215	-	-
Debtors	2,904	1,800	1,098
Cash held at broker	844	1,894	-
Cash and cash equivalents	16,390	28,989	9,556
	20,353	32,683	10,654
Current liabilities
Creditors: amounts falling due within one year	(30,815)	(379)	(10,406)
Derivative financial liabilities	-	(76)	-
Net current (liabilities)/assets	(10,462)	32,228	248
Total assets less current liabilities	432,719	459,693	445,800
Creditors: amounts falling due after more than one year	(30,000)	(60,000)	(30,000)
Net assets	402,719	399,693	415,800
Capital and reserves
Called up share capital	15,037	14,989	15,037
Share premium	176,867	175,576	176,867
Capital redemption reserve	6,680	6,680	6,680
Capital reserves	182,825	180,652	194,276
Revenue reserve	21,310	21,796	22,940
Total shareholders' funds	402,719	399,693	415,800
Net asset value per share (note 5)	678.4p	666.6p	691.3p

CONDENSED STATEMENT OF CASH FLOWS

For the six months ended 30th June 2023

	(Unaudited)	(Unaudited)	(Audited)
	Six months ended	Six months ended	Six months ended
	30th June 2023	30th June 20221	31st December 20221
	£'000	£'000	£'000
Cash flows from operating activities
Net return/(loss) before finance costs and taxation	4,460	(58,158)	(33,371)
Adjustment for:
Net loss on investments held at fair value through profit or loss	4,658	68,379	53,403
Net foreign currency gains	(4)	(275)	(285)
Dividend income	(10,358)	(11,393)	(22,346)
Interest income	(291)	(90)	(339)
Realised gains on foreign exchange transactions	4	275	312
Decrease/(increase) in accrued income and other debtors	11	(14)	(1)
Increase/(decrease) in accrued expenses	210	(28)	18
Net cash utilised in operating activities	(1,310)	(1,304)	(2,609)
Dividends received	10,068	11,011	22,677
Interest received	314	90	316
Overseas withholding tax recovered	-	-	1
Net cash inflow from operating activities	9,072	9,797	20,385
Purchases of investments	(53,943)	(133,414)	(226,611)
Sales of investments	50,486	190,615	280,403
Settlement of foreign currency contracts	-	(2)	-
Settlement of futures contracts	(603)	(724)	(504)
Transfer of Company cash (from)/to the Broker	(844)	3,075	4,969
Net cash (outflow)/inflow from investing activities	(4,904)	59,550	58,257
Dividends paid	(11,083)	(10,162)	(19,156)
Issue of Ordinary Shares	-	3,843	5,182
Repurchase of the Company's shares into Treasury	(5,370)	-	-
Repayment of bank loan	-	(80,000)	(100,000)
Drawdown of bank loan	20,000	40,000	40,000
Interest paid	(881)	(925)	(1,971)
Net cash inflow/(outflow) from financing activities	2,666	(47,244)	(75,945)
Increase in cash and cash equivalents	6,834	22,103	2,697
Cash and cash equivalents at start of period/year	9,556	6,886	6,886
Unrealised loss on foreign currency cash and cash equivalents	-	-	(27)
Cash and cash equivalents at end of period/year	16,390	28,989	9,556
Cash and cash equivalents consist of:
Cash and short term deposits	269	262	157
Cash held in JPMorgan Sterling Liquidity Fund	16,121	28,727	9,399
Total	16,390	28,989	9,556

1    The presentation of the Cash Flow Statement, as permitted under FRS 102, has been changed so as to present the reconciliation of 'net return/(loss) before finance costs and taxation' to 'net cash utilised in operating activities' on the face of the Cash Flow Statement. Previously, this was shown by way of note. Other than consequential changes in presentation of the certain cash flow items, there is no change to the cash flows as presented in previous periods.

Reconciliation of net debt

	As at		Other	As at
	31st December 2022	Cash flows	non-cash charges	30th June 2023
	£'000	£'000	£'000	£'000
Cash and cash equivalents
Cash	157	112	-	269
Cash equivalents	9,399	6,722	-	16,121
	9,556	6,834	-	16,390
Borrowings
Debt due within one year	(10,000)	(20,000)	-	(30,000)
Debt due after one year
£30 million 3.22% Private Placement loan	(30,000)	-	-	(30,000)
	(40,000)	(20,000)	-	(60,000)
Net debt	(30,444)	(13,166)	-	(43,610)

Notes to the financial statements

for the six months ended 30th June 2023

1.     Financial statements

The condensed financial information contained in this half yearly financial report does not constitute statutory accounts as defined in Section 435 of the Companies Act 2006. The financial information for the six months ended 30th June 2023 and 30th June 2022 has not been audited or reviewed by the Company's Auditor.

The figures and financial information for the year ended 31st December 2022 are extracted from the latest published financial statements of the Company and do not constitute statutory accounts for that year. Those financial statements have been delivered to the Registrar of Companies including 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 'SORP') issued by the Association of Investment Companies in July 2022.

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 2023.

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 2022.

3.     Return/(loss) per share

	(Unaudited)	(Unaudited)	(Audited)
	Six months ended	Six months ended	Year ended
	30th June 2023	30th June 2022	31st December 2022
	£'000	£'000	£'000
Return/(loss) per share is based on the following:
Revenue return	9,453	10,398	20,536
Capital loss	(6,076)	(69,408)	(55,784)
Total return/(loss)	3,377	(59,010)	(35,248)
Weighted average number of shares in issue, excluding shares
held in Treasury	59,810,159	59,839,438	59,917,311
Revenue return per share	15.80p	17.38p	34.27p
Capital loss per share	(10.16)p	(115.99)p	(93.10)p
Total return/(loss) per share	5.64p	(98.61)p	(58.83)p

4.     Dividends paid

	(Unaudited)	(Unaudited)	(Audited)
	Six months ended	Six months ended	Year ended
	30th June 2023	30th June 2022	31st December 2022
	£'000	£'000	£'000
2022 fourth quarterly dividend of 10.50p (2021: 9.50p) paid in
March 2023	6,309	5,665	5,665
2023 first quarterly dividend of 8.00p (2022: 7.50p) paid in June 2023	4,774	4,497	4,497
2022 second quarterly dividend of 7.50p paid in September 2022	n/a	n/a	4,497
2022 third quarterly dividend of 7.50p paid in December 2022	n/a	n/a	4,497
Total dividends paid in the period/year	11,083	10,162	19,156

All dividends paid in the period/year have been funded from the revenue reserve.

A second quarterly dividend of 8.0p (2022: 7.50p) per share, amounting to £4,731,000 (2022: £4,497,000) has been declared payable in respect of the year ending 31st December 2023. It will be paid on 1st September 2023 to shareholders on the register at the close of business on 28th July 2023.

5.     Net asset value per share

The net asset value per Ordinary share and the net asset value attributable to the Ordinary shares at the period/year end are shown below. These were calculated using 59,359,718 (June 2022: 59,955,653; December 2022: 60,145,653) Ordinary shares in issue at the period/year end (excluding Treasury shares).

	(Unaudited)		(Unaudited)		(Audited)
	30th June 2023		30th June 2022		31st December 2022
	Six months ended		Six months ended		Year ended
	Net asset value		Net asset value		Net asset value
	attributable		attributable		attributable
	£'000	pence	£'000	pence	£'000	pence
Net asset value - debt at par	402,719	678.4	399,693	666.6	415,800	691.3
Add: amortised cost of £30 million 3.22% private
placement loan March 2045	30,000	50.5	30,000	50.1	30,000	49.9
Less: fair value of £30 million 3.22% private
placement loan March 2045	(22,243)	(37.5)	(28,853)	(48.1)	(23,466)	(39.0)
Net asset value - debt at fair value	410,476	691.4	400,840	668.6	422,334	702.2

6.     Fair valuation of instruments

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

	(Unaudited)		(Unaudited)		(Audited)
	Six months ended		Six months ended		Year ended
	30th June 2023		30th June 2022		31st December 2022
	Assets	Liabilities	Assets	Liabilities	Assets	Liabilities
	£'000	£'000	£'000	£'000	£'000	£'000
Level 11	443,396	-	427,465	(76)	445,552	-
Total value of investments	443,396	-	427,465	(76)	445,552	-

1        Includes future currency contracts.

JPMORGAN FUNDS LIMITED

10th August 2023

For further information, please contact:

Emma Lamb

For and on behalf of

JPMorgan Funds Limited

020 7742 4000

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.

ENDS

A copy of the half year report will shortly be submitted to the FCA's National Storage Mechanism and will be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism

The half year 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.

 

END